What You Need To Know About HOA Insurance

You’ve probably heard that there’s no such a thing as a stupid question, and that’s especially true in regards to HOA insurance. The only foolish move would be NOT to ask. Asking questions like, “Is our HOA covered?” or “What kind of insurance do we need?” are essential to ensuring that your HOA is fully and appropriately covered.

 

If you are on the HOA Board, these are HOA insurance coverages & terms you MUST get familiar with:

 

• D&O Insurance: D&O insurance – or directors and officers liability insurance – is one of the most overlooked and misunderstood policies among HOA boards. Non-monetary and discrimination cases take the lead in lawsuits among HOA boards, and most commercial insurance packages do NOT cover these claims. Find out what your board needs, including coverage for non-monetary damages/claims and breach of contract, and why a stand-alone D&O policy is the only way to go.

• Non-Monetary Claims: Non-monetary claims are the second most common types of lawsuits brought against HOAs. They can be confusing, but they essentially deal with plaintiffs who file a claim that does not have a monetary value to it. Read about an example non-monetary claims here.

• Workman’s Compensation Insurance: Sometimes, your HOA may sign contracts with smaller vendors who may not carry appropriate insurance on their own. Workman’s “comp” will help that employee or vendor with compensation for wages and medical bills, in the case that they are injured on the job.

• Varying Coverage: There are an enormous array of coverage for what kinds of insurance you could purchase, from general liability (which has subcategories of its own) to flood and earthquake insurance, automobile insurance, and even golf course insurance! Every HOA is different, and only your board and community members will know the specific criteria that your HOA meets. Make sure that you carefully consider all of your needs and options.

Learn these, ask about these coverages, and never hesitate to pick up the phone or drop an email to a PDS Community Manager for more assistance – neither you nor your homeowners association will regret it.