Condo associations are responsible for the physical maintenance of their buildings as well as the financial management of their funds. Condo boards owe their memberships a fiduciary duty of care, so it’s imperative that they do everything reasonably possible to protect themselves and their memberships against risk.
Many states have laws that regulate the governance and activities of condo associations. Ensuring compliance with all applicable law is an important part of managing condo risk.
Even if a problem at a condo building is the fault of the management company that the association has hired, the association will ultimately be liable for damage to the property or claims made by its members. It’s essential that condos work with excellent property management companies.
Condo associations need property insurance policies that address the full scope of their risk. In addition, they need general liability policies in addition to a directors and officers policy. D&O insurance will help to pay legal costs incurred by board members if an individual or business entity brings a claim against them personally.
Condo associations should work with an insurance company that is experienced in serving condo boards and understands their unique and complex risk exposure. A knowledgeable representative can help boards find the coverage they need from the best carriers in the marketplace.