Living in a Condo or Co-op building would be chaos without the leadership of a condo/co-op board of Directors and/or Officers to ensure the building’s maintenance, repairs and renovations are up-to-date and protect condo-owners, co-op shareholders and building residents – and the boards themselves – from any possible liability. Condo/Co-op Associations need insurance coverage that includes Fire and Liability Insurance for the building’s common areas, Directors’ and Officers’ Liability Insurance, Bonds, Umbrellas, Flood and Workers Compensation.

At  Muller Insurance, we insure a large percentage of the condo associations in the  New York/New Jersey Metropolitan Area and we are familiar with your needs. Our rates are very competitive and in some cases we can include the Directors and officers (D&O) liability in one policy to save time and money.

It is up to the Condo Association to secure a Master Policy that covers the building and all materials that make up the condo/co-op building. These policies are usually “special form” coverage  which includes losses from fire, lightning, hail, wind, vandalism, sprinkler  leakage, smoke and building collapse. Master Policies are normally written on Business Owner Policy aka BOP or Commercial Package Policy aka CPP. Some  exclusions apply like acts of war, earthquakes, and flood.

It is real important that condo or co-op associations purchase insurance requested in the by-laws insurance section.

Master Policy Coverage can include:

Replacement Cost – Pays for the cost of replacement usually with a stated amount limit (for example: up to 125% of original value) (Note: most condo by-laws require that association building insurance must be replacement cost in case of  a loss).

Actual Cash Value (ACV) – Pays for the value at the time of the loss. This usually includes depreciation and usage deductions.

Guaranteed Replacement Cost – Pays with no maximum limit. Deductibles usually apply to a covered loss.

Condo/Co-op Association Insurance also includes liability coverage for the covered premises. This liability coverage protects the association from a law suit brought against it as a result of an accident or injury that may occur on or in the condo property.  Unit owners need to protect their personal liability by purchasing a Homeowner 6 policy which will cover their interior walls, betterments and improvements, and contents and personal liability. The master policies liability coverage will not cover the owner or tenants’ liability inside the condo or co-op unit.

Directors and Officers Coverage (D&O): The condo association’s directors and officers are also exposed to law suits for their activities pertaining to the management of the association’s business. Directors and Officer’s coverage, usually known as D&O Coverage should be included in master policies. This coverage protects the personal finances and assets of the directors and officers in the event of a law suit.

Other coverages available include:

Boiler and Machinery: Provides coverage for the heating and cooling equipment that services the building. Losses due to wear and tear and age are not covered.

Fidelity Bond: Provides coverage for the coverage association should one of the officers steal money from the condo association.

Terrorism: Provides coverage to your property in the event that it is destroyed by a certified terrorist act.

Flood: Provides damage to your property from rising water. This is a standard exclusion on all policies and a policy must be purchased separately.

Earthquake: Provides coverage for your property if it is damaged by an earthquake. This coverage is a standard exclusion on all policies and must be purchased.

Medical Payments: Provides medical payments for someone that gets hurt on your property and just wants you to pay their medical bills.

Sometimes the association also acts as an employer for work such as painting, minor repairs and snow removal, etc. Employment Practices Liability insurance should be obtained to protect the association in case a suit is brought against them as a result of the work performed.

If you are interested in more information on condominium and co-op coverages, we have information on our website: www.mullerinsurance.com.  Click on Condo Insurance.

The Condo/Co-op Association’s Master Policy should be reviewed every year by board members, the building’s management company and a licensed insurance professional. At Muller Insurance, we handle many Condo/Co-op Associations’ policies and can help you secure complete coverage that protects the association, condo owners and co-op shareholders.

 

 

About Roger J. Muller, Jr.

Overseeing Muller Insurance’s day-to-day operations and always improving how the company can better serve its clients, Roger J. Muller, Jr. is a Certified Professional Insurance Agent (CPIA) with 32 years experience in the insurance industry. He’s a travel agent, Certified Real Estate Appraiser (CREA), Certified Environmental Inspector (CEI), licensed Real Estate Broker and licensed Insurance Agent in the following states: New Jersey, New York, Pennsylvania, Connecticut, North Carolina, South Carolina, Florida, Maryland, Washington D.C., New Mexico, Arizona, Vermont, Ohio, Delaware, Maine, Georgia, Virginia and New Hampshire. Roger J. Muller, Jr. is a member of Sigma Xi, a lifetime member of the Hudson River Fishing Association, and Shriners-Salam Temple. A graduate of Ramapo College of New Jersey, Muller is a past board member of the Ramapo College Alumni. He has been a member of the Board of the Hoboken Chamber of Commerce since 2000 and served as Vice President in 2010.  He is a New Jersey Notary Public and a member of the Young Insurance Agents, NJ. He is a certified member of  the Hoboken Community Emergency Response Team (CERT) that responds to emergencies like building collapses, flooding and acts of terrorism.