Condo Board Members do your liability limits cover your risks

The Champlain Towers condo building collapse in Surfside, Florida is a tragedy that will stay in people’s memories for years to come. Many groups are under scrutiny, including the construction companies, contractors, materials manufacturers, engineers, safety inspectors – and the condo board members. Lawsuits were filed even before the rescue operations ceased.

The professionals who inspected or worked on the building as a part of their job should have professional liability coverage. But what about the condo board members?

Maybe you assume your condo owners policy or professional liability policy will help protect you, but that would be an incorrect assumption. A professional liability policy won’t respond to claims against you in a capacity outside of your profession. And if you yourself are a condo owner, the liability limits on your condo policy are probably too low to adequately cover long-term legal action.

Protect your board

Condo boards are largely made up of condo owners. If you’re like most people, you joined the board because you wanted to keep track of your investment and be an agent of change. But because of unforeseen risk and lack of information, your insurance coverage might not be on par with your actual risk liability exposure.

Unfortunately, liability often leads to lawsuits. Even if a court finds that you’ve done nothing wrong, you still have to mount a legal defense, and that’s an expensive endeavor.

The reality is this: Your condo board makes significant business decisions that have long-term ramifications. Your best bet is to:

• Make sure your condo board has a directors and officers (D&O) policy, not just liability.
• Verify that the policy covers individual board members.
• Confirm the policy limits are high enough to support everyone on the board.

Suppose you’re facing a catastrophic event like a building collapse. The chances are good that the D&O policy will max out well before the legal action is over, leaving some board members without a way to pay for their legal defense.

Protect yourself

From day-to-day building management to overseeing a significant rehab, as a board member, you’re on the line for liability. That’s you as an individual, which means your current and future assets (house, future earnings, college savings) are exposed.

Take a few steps now to make sure you’re personally protected:

• Ask your insurance professional to review your condo board’s D&O policy.
• Get a quote on an individual D&O policy for added protection (this is known as “side A” coverage).
• Review your condo owner policy’s general liability clause.
• Ask about a personal umbrella policy to extend and broaden general liability coverage.

Call your insurance advisor

Give us a call so that we can talk about your risk exposure. We’d also be happy to give a presentation to your condo board, too. 800-392-6532.