Everyone wants to lower the chances of liability when they own property or real estate and the same concept applies to HOA boards. Every decision an HOA board makes leaves the board and the organization vulnerable to liability risk. An HOA’s role in development inherently comes with risk, which is why most HOAs invest in general and excess liability coverage. Not only should you have sufficient liability coverage for your community, but you should also reduce the chances of liability risks as much as possible.
Recognize the Importance of Your Role
Most HOA board members are volunteers, but that doesn’t mean that the role doesn’t come with profound responsibility. Being on the HOA board means you have a duty of care and commitment to your community. Likewise, they must know how to lower the chances of liability for the community’s residents. Decisions and actions must be within the board’s scope of responsibility, adequately informed, and ethical. Prioritize these considerations to reduce liability risk from irresponsible decision-making and actions.
Protect Residents in the Common Areas
A key element of your HOAs umbrella liability insurance is common area liability. Maintain the common areas to reduce the risk of injuries and accidents. Ensure that barbecue and picnic areas, swimming pools, and workout areas comply with local regulations and maintain everything for safe, proper operation.
Common areas are where many injuries occur, so establishing publicly visible rules and regulations for those areas will help reduce liability risk for the HOA. In addition, enforcement should be consistent so that there is no perception of impropriety.
Be Proactive About Neighborly Disputes
Ideally, your community will be peaceful, but neighborly disputes and conflicts occur even in the best communities. If you have a resident complaining of harassment by a neighbor, the board must respond quickly and visibly. While most people do not expect HOA boards to resolve the dispute, they should intervene to prevent harassment. Failure to do so can trigger claims against general and excess liability policies for neglect.
Maintaining a record of communications between the board and the residents is essential, including notices sent to the offender. Document every effort that the board has made to resolve the problem. It clearly shows a response on the part of the board, reducing the risk of a successful liability claim.
Understand the Difference Between Excess Liability and General Liability Insurance
The liability risks associated with HOA operations require extensive protection. General liability insurance is ideal for protecting the board from many claims, but these policies have fixed liability limits that may be insufficient for large-scale claims.
That’s where the excess coverage comes in. Besides a general liability policy, excess coverage provides you with additional liability limits that kick in when the general liability policy’s limits are exhausted.
The best line of defense for an HOA is a good offense. Reduce liability risks within the community as much as possible and establish sufficient general and excess liability coverage for protection if something happens. These policies will help preserve the board’s integrity in the face of a claim.
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.