In life and business, everything is great until it’s not. Just ask any condo association executive or board member who makes decisions about NJ condo association insurance. They can tell you shake your head in wonder stories. That’s because they blend life and business by sharing condominium ownership with their unit owners, which is sometimes a volatile mix.
Whenever a business takes on the role of enforcing rules that affect people’s lives and how they live in their space, it’s only a matter of time before lawsuits, accusations, and recriminations occur. Legal action from condo owners is the most noticeable risk because the media loves the human interest “David and Goliath” stories that such disputes present. Beyond sensational lawsuits, condo associations need protections from various perils.
Here are the most common risks NJ condo associations face.
Typically, a D&O (Directors & Officers) Liability policy will cover litigation costs involving unit owners’ disputes. It will protect board members against management liability-related lawsuits from condo owners, employees, and third parties. It is worth noting that liability can fall to either the association or a specific condo owner, which means it is critical to determine liability on a case-by-case basis by evaluating each situation’s merit individually.
Associations must protect against damage to the property under its control, usually common areas, including residential buildings, clubhouses, pools, playgrounds, outbuildings, fences, signs, and lighting. Property Insurance helps to pay for damages resulting from perils such as fire, vandalism, wind and equipment failure. When appropriate, it’s vital to add supplemental coverage for natural dangers like flood and earthquake.
There are several areas of General Liability risks condo associations face including, Bodily Injury & Property Damage for claims due to non-professional negligent acts occurring on association premises or within business operations. Personal and Advertising Injury, which is coverage for libel, slander, false arrest, infringing on another’s copyright, using another’s advertising idea, malicious prosecution, wrongful eviction, entry, or invasion of privacy. And Medical Payments help pay for injuries sustained by a non-employee caused by accidents on association premises or when exposed to its business operations, such as a “trip and fall” claim.
As a business entity, associations face theft and embezzlement by a board member or employee from the association’s operating reserve accounts through check fraud, invoice padding, phony invoices, computer, and wire fraud. Crime & Fidelity Liability protects against losses due to such risks.
It is a legal requirement in New Jersey that business entities, including condo associations, must provide their employees with Workers Compensation insurance. Should an employee be injured while at work for the association, Workers Comp will help pay for medical expenses.
While we covered the most typical NJ condo association insurance risks in this report, it is advisable to review your unique situation with a team of insurance professionals. Look for an agency with extensive experience reviewing condo association bylaws and Master Deeds. That’s the best way to get a thorough and detailed analysis of your risk exposures. For proper protection and peace of mind, you need a comprehensive program that will cover the association, its executives and board members against the many perils they face.
Taking clients out of harm’s way against insurable risks is the goal of the Dickstein Associates Agency. We seek to use 55 years of risk management expertise to provide solutions that meet our clients’ unique and varied needs. Trust, integrity, transparency, and a commitment to service and advocacy drive our success and that of our clients. It would be an honor to review and quote on your NJ condo association insurance needs.
About Dickstein Associates Agency
Dickstein Associates Agency has distinguished itself as a leading provider of personal and business insurance in the tri-state area for over 55 years. We pride ourselves on being advocates for our clients and providing them with quality and affordable coverages. As an independent insurance agency, we partner with various carriers, allowing for flexible and unbiased coverage for each client’s unique circumstances. For more information on how you can leverage all of your insurance to work best for you, and how we can secure the best insurance in the marketplace based on your specific needs, contact us today at (800) 862-6662.