Employee dishonesty insurance, on the other hand, protects the HOA in the event of theft or property damage brought on by workers. Workers’ compensation insurance shields the association from lawsuits in case an employee suffers injuries while working. This applies to employees working full-time, part-time, and even on a contractual basis. If your homeowners association employs workers in any way, then workers’ compensation is vital. Workers’ Compensation and Employee Dishonesty Insurance This includes violation of the governing documents, breach of contract, failure to buy sufficient insurance, libel or slander, and even discrimination.ģ. Liability claims come in all forms, ranging from monetary to non-monetary. Lawsuits and settlements can run very expensive after all. This policy provides coverage for defense expenses, indemnity, errors, and omissions liability claims. Standing for Directors and Officers, D & O insurance protects the association’s board of directors. Also known as Coverage C, the increased cost of construction covers the cost of required upgrades according to local ordinances. Demolition can be expensive, especially if heavy machinery is necessary. Also known as Coverage B, demolition supplies coverage for just that - demolition. Insurance policies generally only cover damages, so the costs for undamaged portions are left for the HOA to shoulder unless you have contingent liability insurance. Some states, like California, require the demolition of the remaining portion of the property that is left undamaged (if 50 percent or less) in order to rebuild. Also known as Coverage A, contingent liability ensures coverage for undamaged sections of the property. There are three building ordinance coverages, all of which are integral components of your insurance policy.
#Hoa insurance full#
Typically, this means the full replacement cost of the building.
It is imperative to insure your buildings at least according to the amount specified in your governing documents. Here are the most crucial HOA insurance coverages you must obtain:
It is imperative that your HOA understands the different types of policies and why they are necessary. Insurance policies come in all shapes and forms. Similarly, if someone files a lawsuit against your association after they slip on HOA property, the master policy should also cover the cost of legal expenses. For instance, if an earthquake hits and causes damages to the clubhouse, your HOA master policy should cover the cost of repairs. This includes liability expenses, common area repairs, and property damage. This way, your association can cover its bases and choose wisely.Īn HOA master policy typically covers all the general requirements of a homeowners association. When considering your options, it is important to thoroughly scrutinize what each policy covers exactly and if there are any limits. It also varies according to the insurance provider. The coverage, both the extent and the specifics, depends on the policy.
There are many types of insurance policies that a homeowners association must get, each one with its own distinct purpose. No matter the size of your HOA, though, there are some essential policies to keep in mind. But, with several different HOA insurance policies available, it can be difficult to make a choice. Every homeowners association must have comprehensive insurance coverage to protect itself, its members, and its employees.
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