Insurance & Claims

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  • What insurance should an association carry?

    The answer depends upon the association type, governing documents, property and applicable Illinois law.


    Typical areas of coverage can include property, general liability, directors and officers liability, crime/fidelity and other specialized coverage.


    Insurance should be reviewed with a broker experienced in community associations.

  • Does association insurance cover everything inside a unit?

    No assumption should be made that it does.


    Association insurance and an owner's personal unit policy serve different purposes. The declaration and applicable law also affect insurance responsibilities.


    Owners should maintain appropriate individual coverage even when the association carries substantial insurance.

  • What is directors and officers insurance?

    Directors and officers—or D&O—coverage is designed to protect against certain claims arising from Board governance and decision-making.


    Given the decisions volunteer Board members are asked to make, appropriate D&O coverage is an important component of association risk management.

  • Should the Board file an insurance claim for every loss?

    Not necessarily.


    The Board should evaluate the nature and amount of the loss, applicable deductible, policy terms and advice from appropriate insurance professionals.

  • Who pays the association's insurance deductible after a loss?

    The answer may depend upon applicable law, the declaration, the circumstances causing the loss and the association's insurance provisions.


    Boards should avoid automatically charging a deductible to an owner without first confirming legal authority.