Risk & Business Magazine Knight Archer Insurance Fall 2016 | Page 25

YOUR CONDOMINIUM ASSOCIATIONS

Your Condominium
Association
Risk Management

C

ondominium Associations can
be threatened by a variety of
risks and holes in insurance
coverage. They have to handle
money and hire contractors like
a business, insure property like a homeowner
and maintain public areas like a park
service. With all these roles, Condominium
Associations have risks coming from every
angle. A professional association will
be on the lookout for potential dangers
and ready to confront any problem.
WHAT ARE MY RISKS?
Only property owned by the Condominium
Association can be protected by its
insurance, yet it still can be held liable
for accidents it could not control. As a
result, communities and condo buildings
present challenges when tailoring adequate
coverage for all parties involved.
Nearly anything Condominium Associations
are involved with can be a source of trouble.
Unfortunately, many times Condominium
Associations aren’t aware of potentially
costly risks. Here are just a few frequently
missed risks to Condominium Associations:

•
•
•
•
•

Board negligence
Equipment maintenance malfunction
On-the-job staff injuries
Events and liquor liability
Inadequate auto coverage

For any Condominium Association,
an ounce of protection can go a long
way. Analyzing and shrinking your
potential risks is the best way to put a
stop to problems before they start.
WHERE TO LOOK
Lapses in Condominium Association
insurance coverage usually
occur in one of two areas:

•
•

Damage to personal property
Liability or property damages
incurred by Condominium

Association board members
Many Condominium Associations don’t
consider damage to renters’ or owners’
personal property their responsibility.
This is typically an accurate view, but in
some circumstances, the Condominium
Association can be held accountable for
damages incurred by machinery, plumbing
or landscape it is responsible for keeping.
For instance, if a water heater maintained
by an Condominium Association employee
broke down and flooded the floor of a condo,
basic property insurance will likely pay for
repairs to the floor and walls. However,
an upset owner may seek compensation
from the Condominium Association for
all the electronics ruined by the water.
Such compensation would likely not be
covered by basic property insurance held
by the Condominium Association.
Many Condominium Associations
also don’t consider the inherent risks
that having officers creates. Too often
Condominium Associations consider
their board members inscrutable, only
to find out about embezzlement of
Condominium Association funds. Similarly,
poor repairs or dishonest actions made by
anyone hired by the board can cause the
Condominium Association to be held liable
for damages or loss of private property.
DEALING WITH THE RISKS
Condominium Associations take on a
variety of risks. While many are prevalent
and destructive enough to demand
i