Atlanta homeowners associations (HOA’s, POA, Property Owners Association and Community Improvement Associations) normally carry four different types of insurance: property, fidelity, general liability, and directors and officers (D&O) Insurance.
Property Insurance. Property insurance covers all of the common structures and amenities in the association. Some examples of structures that property insurance will cover include monuments, common walls and fencing, clubhouses, pools, play structures, and sport courts. For example, if a person crashes into a monument with their car and drives off, the association’s property insurance will cover the costs to repair the monument. Another scenario that often plays out is when a driver fails to negotiate a curve along the main street in the neighborhood and runs into the association’s perimeter fencing. If the driver does not have insurance to cover the damage, the association’s insurance will pay to have the fence repaired.
General Liability Insurance. Another type of insurance that the association should carry is general liability insurance or what some people call “slip and fall” insurance. If a homeowner slips and falls running on the wet deck of the pool area and sues the association, the General Liability insurance will pay for a legal team to defend the association. General Liability insurance becomes even more important if the association has a pool, pond, lake, or playground. These are the places where homeowners are most likely to get hurt while on association owned property. Association’s can protect themselves somewhat, by having homeowners sign a liability release form before they are issued keys to the pool, playground area, etc. This liability release form should state that the homeowner understands that there are certain risks associated with using amenities and releases the association from liability should an accident occur. The homeowner should be required to initial certain areas of the form and sign at the bottom. It is recommended that all homeowners sign a liability release form before enjoying the association’s amenities.
D & O Insurance. The third type of insurance that an association should carry is directors and officers (D & O) insurance. This insurance protects the board members from personal liability. All associations, whether they are under developer control or homeowner control, should carry directors and officers insurance. Board members can be held personally responsible for acting on behalf of the association. For this reason, most board members demand that they be protected from claims being filed against the association and the board. Also, homeowner board members are volunteers and are not willing to serve on a board of directors if they are not personally protected from liability. Please note, however, that directors and officers insurance typically will not cover a claim of discrimination of any kind. If a homeowner files a claim of discrimination against the board of directors, typically the association will be responsible for paying any legal fees to defend the board and any judgments that may be awarded to the opposing party.
Fidelity Insurance. Fidelity insurance covers theft of association funds. Unfortunately, theft happens all too often so fidelity coverage is essential for every association.
Get the right insurance for your Atlanta HOA or condo association so you can sleep at night with one less worry.