A homeowners association or HOA must have insurance just like individual homeowners. Home HOA insurance covers the association for risks involved with property maintenance and liability concerns in neighborhoods that have a homeowners association. Yet this insurance is different than regular homeowners insurance. Associations must ensure they are covered with the right home HOA insurance that is specific to the needs of an HOA to keep everyone, and everything, protected.
General Liability Property Insurance
Property insurance, also termed general liability insurance, is necessary for any HOA that deals with condos and co-ops to protect their buildings. These policies cover the structures themselves, not their contents, which are the responsibility of the condo owner or renter.
Regular Liability Insurance
HOAs also need standard liability coverage that protects against things like injuries to visitors who enter the covered buildings, etc. It is important for HOAs to understand that their general liability policy does not cover these risks. Therefore, adding regular liability coverage to a homewners HOA insurance policy is essential.
D & O Coverage
Liability that specifically covers the Directors and Officers of homeowners associations is also an essential coverage for HOAs. This important policy addition protects volunteer officers from liability should there be claims against the homeowners association for any reason.
Social Host Liability Coverage
Some homeowners associations have clubhouses and social gathering places where members and other guests can meet for planned events. Many HOAs even rent their facilities for weddings and special events. If alcohol is ever served on association grounds at any of these events, HOAs need liability coverage. If the HOA does not permit the serving of liquor on the grounds, this coverage may not be necessary.
An association that has a garage where non-members are permitted to park must have garagekeeper’s insurance. This insurance protects the HOA and the vehicle owner against vehicle damage or theft while that guest is on the premises and parked in the association’s garage.
Workers’ Compensation and Employee Dishonesty Bonds
Like any other business, if a HOA has employees, workers compensation insurance is necessary to avoid lawsuits should an employee be injured while on the job. These policies are also recommended for associations that do not have employees yet pay contractors or freelancers, as these individuals could claim employee status depending on the scope of the job they perform and if they are a regular worker on association grounds. Employee dishonesty bonds protect the association from theft and damage of association property by dishonest employees.
Discrimination Claims Coverage
For associations in the position to foreclose on residents who fail to keep up with their mortgages, discrimination claims coverage is a must. When facing foreclosure, many people look for any way to avoid losing their homes; one of those ways may be filing a discrimination claim. This important home HOA insurance covers associations against this liability in the event they are required to foreclose against a person who is of a minority statu, or some other protected individual. Discrimination coverage is becoming more important for HOAs as foreclosure rates continue to climb.
These coverages are very different than those provided by any standard homeowners insurance policy. The purpose of home HOA insurance is to protect the association as a business, as well as the people associated who are responsible for making decisions for the association. To learn more about necessary home HOA insurance, homeowners associations should contact an experienced homeowners insurance company to help them determine the various types of coverage they need!