Condo associations and homeowners’ associations need to be protected. Insurance for associations protects against claims of wrongful acts. Lawsuits can be devastating if you aren’t prepared. As an association, it’s important to know the risks you’re up against. Here are some of those risks.
There are many reasons that someone may file a claim against your organization. If a resident or employee does not feel like he or she received fair treatment, there may be a lawsuit. Here are some of the common reasons for a lawsuit:
- Misuse of funds
- Breach of contract
- Wrongful foreclosure
- Breach of fiduciary duty
All of these risks can lead to costly lawsuits that most organizations cannot pay for out of pocket.
Board Member Risks
Most condominium associations already have general liability insurance. This protects the association but not the individual board members. It’s important to look at your existing policies to find out who is covered. You want to explore all of your options and find out how to provide everyone with coverage. This benefits the whole organization.
Insurance for associations is more crucial than you might have first thought. Without it, you leave the association vulnerable on the chance that there is a lawsuit. Not to mention, your individual board members may not be safe.