Community Asset Protection
Board members (and, in particular, the president and treasurer) have a fiduciary obligation to protect the community association by:
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- Preparing and adhering to an association budget
- Adequately funding reserve accounts and educating homeowners
- Collecting fees from homeowners
- Seeking the advice of a certified insurance specialist and
- Protecting the association with appropriate levels of insurance
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Recommended Insurance coverage:
Directors and Officers Liability – Protects officers for decisions they make while serving the community. The officers can be held liable for mismanagement or misrepresenting the community business.
General Liability – Protects your community from claims resulting from injury where common elements of the community are involved. Communities with major amenities are advised to carry higher limits of liability. These decisions will be made by you and your insurance provider.
Property – Provides coverage for common elements or property assets that are damaged as a result of unforeseen incidents.
Communities with amenities that include swimming pools, club houses, equestrian facilities, and golf courses are most vulnerable and should maintain higher levels of liability and property coverage. Coverage levels should be reviewed each year as your property conditions change or as major improvements are made. Insurance providers may or may not increase rates at the time of renewal. It’s in your best interest to contact your provider for increases that may impact your annual budget.
Best Practice and Best Choice
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