Condominium associations provide property and liability insurance, often called habitational insurance, as part of the condo owners’ monthly association dues. These policies cover damage to shared components, such as the structure of the condo building, exterior features, parking, and landscaping. They also cover common areas, such as a clubhouse, pool, and other recreational amenities. Individual condo owners then purchase homeowners insurance to cover their belongings inside their unit.
A basic habitational insurance package for a condo association will include:
- Commercial property coverage: This covers damage to the shared portions of the condo building(s), such as the roof, walls, electrical lines, plumbing, and the exterior, along with outdoor features such as parking and landscaping.
- General liability coverage: This covers any liability claims arising from accidents on the condo association property, whether inside or outside the building(s), such as slips, trips, and falls. This also covers claims related to insufficient security or not completing needed repairs, where the property manager or condo association board could be found to have been negligent.
There are other useful coverages a condo association board could add to its insurance package:
- Directors and officers (D&O) coverage: This covers personal liability related to board members’ actions, where someone could accuse them of negligence or discrimination and sue. These types of lawsuits can target board members personally in addition to the association as a whole.
- Workers compensation: If the condo association has any employees, such as maintenance staff or property managers, this is a legal requirement. But even if an association doesn’t formally employ anyone, this coverage is useful in case a volunteer injures themselves while working on behalf of the condo association.
- Fidelity liability: This coverage is especially for the costs of financial misdeeds by board members, such as embezzling or stealing money from the association.
- Single entity coverage: This covers interior features of condos put in place by the builder, such as flooring, countertops, light fixtures, and interior doors.
Condo owners are still responsible for taking out homeowners insurance to cover their personal belongings and improvements they make to the inside of their unit. Homeowners insurance will also cover liability related to accidents that occur inside the individual owner’s unit.
Here at Kamm Insurance Group, we have agents who are experts in habitational insurance for condominiums, so they’re familiar with the Illinois Condominium Property Act, as well as the unique claims process that condo associations and owners face. They can also provide you with risk management guidelines, what activities the board can do to reduce the risk of a loss. If you’re a condo association board member looking for new condo association insurance, reach out to us today!