State laws pertaining to condominiums and most project legal documents creating condominiums require the association to carry a master insurance policy covering the entire project including the individual units. This is the only approach to insurance that makes any sense in a high rise project, and in most lateral projects it also makes sense because of the interrelationship of individual condominium units and the project’s common areas. In planned unit developments, the advisability of having a master policy depends to some extent on the type of construction. With attached townhouses or row houses, it is possible that a master policy is preferable to individual policies covering each dwelling.
Unfortunately, some community associations have curmudgeons – bad-tempered, difficult, cantankerous people who treat the board of directors, managers and residents with disrespect, derision and sometimes even contempt. These individuals believe they are always right and that they can always do a better job than those in charge.
Curmudgeons, regrettably, do exist.
It’s called “sleep insurance” for a reason.
Directors and officers (D&O) liability insurance helps community association board members sleep well at night without worrying that their personal assets are at risk because of a decision or action – or inaction – they make on behalf of the association.
A variation of Murphy’s Law states, “If there’s more than one possible outcome of a job or task, and one will result in disaster or an undesirable consequence, then somebody will do it that way.” If only hard-on-his-luck Murphy weren’t right.
Murphy must have lived in a community association! Take, for example, the conundrum of committees. They’re created to give your board a way to gather information and suggestions, offer new ideas and opinions, and perhaps provide a launching point for future board members. A committee can function as a think tank or an indicator of how the community will react to a given issue. Sounds great, right? Well, not exactly. Remember what ever-the-pessimist Murphy said.