Insurance for Condo Associations and HOAs
A condominium association is responsible for shared property, common areas, and the financial well-being of all unit owners. Board members make decisions that can lead to disputes, lawsuits, and financial claims. A proper insurance program protects the association itself, the board, the property, and the residents.
Key Coverages for Condo Associations
- Master Property Policy - Covers the building structure, common areas, and shared systems (roof, exterior walls, lobbies, hallways, elevators). Coverage scope ("bare walls" vs. "all in") varies by association governing documents.
- General Liability - Covers third-party bodily injury or property damage claims arising from common areas — a slip in the lobby, an injury in the pool, or damage caused by an association-employed contractor.
- Directors and Officers (D&O) Liability - Protects board members personally from lawsuits alleging mismanagement, breach of fiduciary duty, discrimination in rule enforcement, or other board decisions.
- Fidelity / Crime Coverage - Protects association funds from theft or fraud by employees, board members, or management company staff.
- Umbrella Liability - Extends your general liability and D&O limits for large claims that exceed underlying policy limits.
- Workers Compensation - Required if the association employs maintenance staff, groundskeepers, or other workers.
D&O Protection for Board Members
Board members volunteer their time and make difficult decisions about budgets, rules, and assessments. Without D&O coverage, they can be personally liable for those decisions if a unit owner sues. D&O insurance covers legal defense costs and settlements arising from board member decisions, giving board members the confidence to act in the association's best interest.
Frequently Asked Questions
Who is responsible for insuring individual units?
Individual unit owners are responsible for their own interior coverage and personal belongings through their own condo insurance (HO-6) policy. The association's master policy covers the shared building and common areas only.
How do we determine the right master policy coverage amount?
Coverage should be based on the replacement cost of the entire building, not market value. We can help coordinate a proper replacement cost appraisal to make sure you are not underinsured after a major loss.