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Community Associations Non-Profit Insurance

Non-Profit Insurance • Community Associations • 501(c)3 Non-Profits • Performing Arts Insurance • Social Services • Fraternal Clubs

Residential Associations have a variety of needs. Lionstone will provide you comprehensive coverage options specifically designed for Homeowner, Townhome and Residential Condominium Associations that include Directors and Officers Liability, General Liability, Property, Commercial Umbrella and Crime coverage.

Overview
Claim Examples
Why
Overview

Product Options:

  • Directors and Officers Liability with Employment Practices coverage
  • General Liability
  • Property
  • Commercial Umbrella
  • Crime

Directors and Officers with Employment Practices Liability

  • Manager/Management company automatically named as an additional Insured
  • Lifetime Occurrence Reporting Provision for former Directors and Officers

General Liability

  • Defense costs are outside policy limits
  • No Deductible
  • Hired and Non-Owned Auto Liability coverage available
  • Mental Anguish and Emotional Distress included in the definition of Bodily Injury

Property

  • Special Cause of Loss form available
  • Outdoor Enhancement Endorsement

Commercial Umbrella

  • Limits up to $5,000,000
  • Coverage available over the Directors and Officers Liability, General Liability and Hired and Non-owned Auto coverage

Crime

  • Theft of money, securities and other property by employees of the insured association
  • Coverage provided for employees, directors, officers, committee chairs, and volunteers without having to schedule them
  • Coverage can be extended to cover theft of the association’s money/securities by a property manager’s employees
  • Coverage in the association’s name to protect the assets of the organization
Claim Examples

Directors and Officers Claims Examples

  • Mismanagement of Funds: A Community Association Board of Directors makes assessments on its homeowners to cover unforeseen costs instead of collecting monthly dues. The Board does not believe in holding a large reserve of assets. The bylaws mandate that each owner complies with the decision of the Board. One homeowner ignored the numerous requests from the Board to pay the assessment. Finally, a lien was placed against the property. The homeowner countersued the Board of Directors alleging mismanagement of funds as well as libel and slander for printing his name in the association newsletter for being delinquent.
  • Breach of Contract: The Community Association Board entertained bids by companies to waterproof the deck around their pool. The contract was worth approximately $120,000. ABC Company submitted the lowest bid and was told the work would have to be started in three months and completed in two weeks. ABC Company bought a performance bond, blocked off the necessary time, and in so doing refused to take other jobs. The Board was having other work done around the pool and encountered problems. A week before ABC Company was to begin work the Board notified them they couldn’t start and it might be another three months before they could come on the site. ABC Company sued the Board for breach of contract.
  • Non-Monetary: A homeowner presented plans to build a home on a corner lot. The Community Association Board affirmed the plan based on the plan’s presentation of the driveway coming out on the street in front of the house. During the process of building the home, the homeowner changed the plans, which caused the driveway to come out onto the street closest to the garage. The Board threatened them with a cease and desist letter. The homeowner sued the Board for declaratory judgment claiming the Board does not have the authority to tell the homeowner where their driveway can be placed.

General Liability Claims Examples

  • Bodily Injury: A guest of a unit owner trips and falls on the sidewalk maintained by the Community Association. It is found that the sidewalk was cracked 3 months prior to the incident. The Association was made aware of the hazard but did not correct the problem. The guest sued the Association for $6,500 in medical expenses sustained as a result of the injury.
  • Non-Monetary: The Community Association Board has a “no pets” rule. Neighbors of a unit owner complained that they have seen a cat in the unit’s window. The Board enforces the rule and sends a letter reminding the unit owner “no pets.” The unit owner denies having a pet. Periodically the neighbors continue to make similar complaints. The Board advises the neighbors that the unit owner denies having a pet in the unit. By chance, the management company sees the cat in the window. They bring it to the attention of the Board. The Board advises the management company to write a letter to the owner advising to get rid of the cat or face a daily fine. The owner finally admits she has a cat, but needs it for therapy for her disability of depression. The Board requests a medical note. The owner produces a note, but it lacks a letterhead. The Board rejects the note and states they need a note on a medical letterhead. The owner produces a note from a local clinic signed by a third year resident. At the time she presents the note she also files a claim of discrimination with the State Human Rights Commission (HRC).The HRC concludes that under the guidelines, once the owner produced the note, the Board was in violation to continue any fines or attempts to collect the fines. In addition, the Board was not allowed to question the medical credentials of the third year resident or the length of treatment. The HRC awarded damages to the owner.
Why

The community association insurance is designed for Homeowner, Townhome and Residential Condominium Associations including: Directors & Officers Liability • Employment Practices Liability • General Liability and Property Insurance • Umbrella Policy • Crime Policy.

Why does your Community Association need to purchase all of these coverages?

  • Community Associations are sued by their employees, committee members and volunteers
  • Over 60% of the claims against these associations are related to non-monetary issues
  • Community Associations have an annual budget that is often less than the average cost to defend a claim closed by litigation
  • Single Dwelling Homeowner Associations require General Liability and Property Coverage for common areas
  • Many Condominium and Homeowner Associations are looking for additional liability limits offered through our Umbrella policy

Why should you choose our Community Association Package:

Maximize efficiency: One Application, One Quote, One Underwriter, One Policy, One Renewal, One Carrier for all claims, with one concurrent effective date.

Coverage Features checklist:

The following are important coverages to have in your policy. Check to make sure you have all of these features:

Coverage Features Our Policy Competitors’ Policy
 Manager/management company automatically named as an additional insured ?
 Defense Outside the Limit of Liability ?
 Non-monetary and Breach of Contract Coverage offered under Directors & Officers Liability ?
 No exclusion for libel, slander, or defamation under Directors & Officers     Liability ?
 Mental Anguish and Emotional Distress included in the General Liability definition of    Bodily Injury ?
 No General Liability deductible ?
 Property with an Outdoor Enhancement Endorsement ?
 Umbrella policy excess of general liability, hired & non-owned auto and directors and  officers liability ?

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