Condo Associations and Understanding Directors & Officers Liability
Whether you live in a condo or are a director or official of a condo association, a lot goes into securing the right insurance coverage. Beyond needing to know when a unit owner or the condo association is liable, those within the association also have directors and officers liability to consider. To make meeting your insurance needs less of a headache, Muller Insurance explains condo association insurance and when extra coverage outside of a standard policy might be wise.
About Condo Associations and Their Responsibilities
A condo association, much like a homeowners association, is an organization that condo unit owners within a community join to maintain their shared living space. Put simply, the condo association takes care of the premises and common areas, as well as sets covenants, conditions, and restrictions (CC&Rs) that its building tenants must follow.
Typically, there is an elected board that has a leadership role in maintaining the functions and meeting the responsibilities of the condo association, which include upkeep, maintenance, and enhancement of common areas to be shared by the unit owners. So what does this mean in the event that something goes wrong?
If an injury occurs in a common area or damage is sustained to a shared space, the condo association is held liable. Anything that happens within individual units, however, is the condo owner’s responsibility. Therefore, it’s important for the condo association itself to have insurance to cover anything that might happen. This is doubly true for the directors and officers of the condo association, who themselves could be held legally and financially liable in case any sort of impropriety is found – whether that individual is directly at fault or not.
Directors & Officers Liability Defined
Directors and officials can often be held liable for accidents, damage, injuries, and more if a claimant can demonstrate some sort of impropriety. Even if you aren’t really at fault, a legal claim could cost far more than typical insurance will cover. While a condo association’s insurance policy provides protection for the association as a whole, it could leave individual members unprotected. Sometimes, even a misunderstanding can turn into a lawsuit. Examples of the most common causes of director and officer insurance claims include:
- Breach of contract
- Misuse of funds
- Discrimination
- Wrongful foreclosure
- Negligence
Although the condo association’s insurance offers protection for claims happening in common areas, there are still many situations in which directors and officers can personally be held liable for hefty legal and financial consequences. That’s why additional insurance for condo association directors and officers is so important.
Choosing the Right Insurance Coverage
Whether you’re an owner, director, official, or have some other relationship with the condo association, it’s important you understand your insurance policy, what is covered, and to what dollar amount. Having the right insurance is one of the very best ways to protect yourself, and at Muller Insurance, we offer policies that offer protection for all aspects of a condominium, including:
- Condo unit owner insurance
- Renters insurance
- Condo association insurance
- Director and official insurance
- Flood insurance
- Earthquake insurance
- Umbrella insurance
Serving New Jersey for over 100 years and assisting clients in multiple states, Muller Insurance can help you find the right coverage for your unit, association, or liabilities as a director or official. For help determining your condo association liability, contact Muller Insurance today.
