Excess Liability Insurance and Why The Condo Board Should Have It

Excess liability insurance is an essential policy for condo owners, especially after recent events that made it critical. According to statistics, nearly 74 million people in the U.S. reside in communities with condominium or homeowners’ associations. These millions rely on their HOA or condo board to maintain the community’s safety, invest in necessary amenities, and tend to maintenance issues. Insurance offers protection if the board fails to fulfill these responsibilities, but standard coverage may not be enough.

The Importance of Excess Liability Insurance for Condos

Find out why a condo board should have excess liability insurance.

Condo Board Members Need Protection

The members of a condominium’s board must always act in the interest of residents. The board’s bylaws will indicate this. Sometimes, board members may experience conflicts of interest or other issues that compromise their ability to serve residents. Conversely, even when a board member fulfills all duties, residents may find fault. In either of these instances, board members may be liable for damages or face litigation, but an excess liability insurance policy offers protection.

Negligence Can Lead to Tragedy

Sometimes adverse events happen that are outside the control of a condo board. It was the case in 2021 when a condominium complex in Surfside, Florida inexplicably collapsed. Tragically, 98 people passed away, and investigators have yet to pinpoint a cause for the collapse. Clearly, a condo board is not responsible for incidents like this, but it may still face litigation in the aftermath of major incidents. Excess liability coverage shields a condo association from liability in such instances.

Standard Insurance Coverage May Be Insufficient

Board members of a condo association must also consider whether their current insurance coverage is adequate for the potential costs that may emerge after a mishap. Most incidents won’t be as disastrous as the aforementioned condo collapse, but a condo board is still susceptible to financial fallout if adverse events occur. In this case, a standard insurance policy is unlikely to cover the extent of the expenses that may emerge, and individual board members may even be vulnerable to legal action.

Gaps in Insurance Result in Exposed Liability

If a standard condo insurance policy doesn’t offer enough protection, how can a condo association shield itself from litigation and liability? Excess liability coverage bridges the gap between a typical policy and an association’s exposures so that board members’ personal assets are not at risk. This type of coverage extends beyond most excess policies’ limits, ensuring that claims receive sufficient coverage. It is imperative to protect against the potential of costly settlement payments.

A Condo Board Must Advocate for Residents

In addition to protecting a condo board and its members, excess liability coverage can protect residents, too. It is because mismanagement, negligence, and disasters can seriously disrupt residents’ lives. These problems may cause physical or financial losses in some cases, leading residents to pursue reimbursement or compensation. Excess liability coverage ensures that a condo association can cover the costs of claims like this, advocate for residents’ needs, and handle their concerns with care.

About Kevin Davis Insurance Services

For over 35 years, Kevin Davis Insurance Services has built an impressive reputation as a strong wholesale broker offering insurance products for the community association industry. Our president Kevin Davis and his team take pride in offering committed services to the community association market and providing them with unparalleled access to high-quality coverage, competitive premiums, superior markets, and detailed customer service. To learn more about the coverage we offer, contact us toll-free at (855)-790-7393 to speak with one of our representatives.