Services Provided by Ted W. Allen & Associates

PROVIDING INSURANCE PROTECTION FOR
CONDOMINIUMS, TOWNHOMES AND COMMUNITY ASSOCIATIONS

Property

Property Insurance is provided to cover the "common area" as defined in the Association's Documents. The Association's members/owners and mortgagees
are protected from financial loss should the insured property suffer damages from fire, windstorm, hail or other insured perils. The "real property" normally includes all buildings, fences, swimming pools, sport courts, carports, garages and other pertinent structures, which are described or defined within the policy. Other property owned by the Association, such as business personal property (contents), may be added to this policy for coverage.

There is a deductible applicable to any covered claim. The deductible amount is negotiated when the policy is purchased The Association Documents or Board of Directors determines who pays the deductible.

General Liability

General Liability Insurance normally covers claims that occur within the "common area" as defined by the Association Documents_ This is area located outside of any individual member/owner's property, but within the Association boundaries. This provides protection for bodily injury or property damage claims arising out of the ownership or operation of the Association's property. Claims arising from swimming pool accidents, slip-and-falls, assaults, and other injuries or damage caused by alleged wrongful acts or negligence of the Association may be subject to this coverage.

There is usually, but not always, a deductible applicable to any claim filed under this policy. Any deductible is negotiated when the policy is purchased.

Business Automobile Liability

If the Association owns automobiles, it would insure the automobiles against physical damage and provide liability insurance protection for claims made for bodily injury or property damage arising out of the ownership, operation or maintenance of these vehicles. Equally important, however, is liability coverage for "non-owned/hired" automobiles. Although the Association may not own any automobiles, they are exposed when other parties such as employees, agents, or "independent contractors" become involved in an automobile accident while using their automobiles during the course of working for the Association. If such parties are involved in an automobile accident while working for the Association, any third party also involved may file a claim against the Association for alleged injuries or damages. This coverage is designed to protect the Association's interest.

There may or may not be a deductible on claims, but usually the deductible is the same as on the General Liability Policy.

Directors

This coverage is provided to protect the volunteer non-professional board of directors’ members in the event a claim for damages is made against the board or individual members. This coverage is designed to insure the board members so they can freely function in a business manner while executing the duties of their office. This coverage also protects other volunteer workers such as committee members.

There is usually a minimum deductible $1,000 per claim.

Non-Owned/Hired Automobile Liability

Even though the association may not own any automobiles, there is a possibility for a claim to be made against the association where this coverage is needed. In the event someone such as a board member, “independent contractor,” or any other person or organization doing work for the association is involved in an automobile accident, the association could be legally involved and named in a potential suit. This protects the association against such suits.

There may or may not be a deductible on this policy, but normally it is the same deductible as on the general liability policy described above.

Umbrella/Excess Liability

This coverage is additional protection over the general liability, directors & officers liability, and non-owned/hired automobile liability policies. The association can choose whatever they feel would be an adequate limit. The limit of this policy is a minimum of $1,000,000 per claim and most of the time the coverage would have a maximum limit of $5, $10, $15, or $25 million per claim.

There is normally no deductible under this policy.

Crime/Fidelity

Most by-laws/documents of the associations require that the board provide ample “dishonesty” insurance to protect the association. This coverage pays in the event should someone entrusted with the finances of the association co-mingle the association’s funds with their own. It is important that the association maintain an adequate limit of coverage. The amount of coverage needed will vary according to the size of the association and amount of money controlled. Usually $25,000-$50,000 is a very minimum amount because a loss can continue over an extended period.

There is normally a $1,000 deductible per claim.

Workers Compensation

Workers Compensation is provided to protect both the association and employee in the event the employee is injured during the course and scope of their employment. It is a “no fault” plan that provides medical payments and weekly disability benefits for an injured employee. This coverage is important even though the association may not have any employees for which payroll taxes are withheld. An “independent contractor” can be deemed to be an employee if he does not provide the association with a valid certificate of workers compensation insurance.

The present minimum premium, which reflects no employees and no payroll, is $250 per year. This is money well spent. Consider the lowest price bidder on the tree trimming, exterior painting, sidewalk/driveway repairs, carpentry work, fencing, electrical, roofing, etc. These workers may not have valid workers compensation coverage.

There is no deductible applicable to the benefits of the workers compensation policy.

Boiler/Machinery

This policy is designed to cover losses such as explosion or breakdown of a boiler or machinery that results in damage to the boiler or machinery. It also can provide coverage for loss of use and extra expense from damage to the building housing the boiler/machinery. This policy is not designed to cover individually owned water heaters that owners may have in their units.

There is normally a $5,000 deductible for any claim under this policy.

Notice

The foregoing description of coverages is not intended as a complete description of the individual policies that provides the different coverages. In order to have a better understanding of the protection, we must be guided by the complete policy wording, which details the terms, conditions, and limitations applicable to each coverage. The entire policy contract will always prevail regarding application of coverages.