Community associations are tasked with keeping residential areas well cared for and safe, managing routine maintenance and watching out for the security of the subdivision or building. A homeowners association insurance policy is an important part of fulfilling that responsibility. Though you may be confident that your association’s directors and officers are diligent about fulfilling their duties, there are nonetheless many situations in which an insurance policy could be necessary to protect the community’s interests.
Even as the leadership in your community association works to maintain property values and the highest possible quality of life for residents, plenty of things can still go wrong. There are always possibilities for directors and officers to encounter unexpected accidents, make mistakes or overreach their authority. Having the right protection is an essential step to keep an error or uncontrollable circumstances from causing a financial crisis for the community.
Enforcing community rules
“Residents often complain their community association goes too far.”
One vital part of a community association’s work is informing all residents of any regulations on how they care for their homes and what alterations they are allowed to make. New occupants may sign a restrictive covenant that places limits on anything from installing a pool in the backyard to painting the house’s exterior a new color. When the board provides guidance to the members of the community and works with them to resolve any conflicts, these tasks contribute to keeping home values high.
However residents often complain their community association goes too far in enforcing rules and administering maintenance fees. At times, these disputes can even lead to legal action, with neighbors going to court over the construction of a new swing set or placement of unsightly lawn signs. Should a disagreement about the content of a covenant go that far, directors and officers on community association boards will be glad to have liability protection in place.
Watching out for safety
The community association is obligated to ensure that the building or residential area stays secure and to take steps to minimize the chances of injuries for residents, employees and guests. However, a wide range of events can occur that might leave the association or its directors and officers open to liability claims. Accidental injuries, criminal activities by intruders or dishonest employees, broken down equipment or natural catastrophes all present major risks.
Depending on the association, it may also be necessary to take into account the possibility of someone being hurt in a pool or pond or consider that someone could be injured due to actions taken by a security guard. However, the community association is able to minimize losses due to these unforeseen events by arranging for coverage that goes beyond general liability. With an umbrella policy, even if there’s serious problem that leads to multiple claimants filing a lawsuit, the community association is prepared to manage the situation.
Protecting personal information
Along with the physical well-being of residents and workers, the community association must also watch out for the security of private information. Strict procedures should be established to prevent unauthorized access to that data, along with keeping careful track of any time this information goes to a third party. Even with these measures, however, records might be compromised due to fraud or residents could grow dissatisfied with the treatment of their personal details and financial information.
Choosing the right policy
A community association faces the potential for a huge range of financial risks, and that means leaders must consider the best way to guard themselves. McGowan Program Administrators offers a variety of coverage options, including Community Association Package Insurance, Directors and Officers Insurance, Crime Insurance and Umbrella Insurance. With the Power of the Pen on their side, community associations can customize policies to fit their precise needs.
