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Subject: Completely Independent Liability Insurance Inspection and Review?
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GeorgeS21
(Florida)

Posts:1262


08/05/2019 6:22 AM  
Hi All,

Hi All,

Still working to understand our 314 property single family POA in Florida. Slowly uncovering issues - some typical, some different by virtue of the way the community was developed. Fully funded Reserve Study-based reserves.

Topic is liability insurance.

We have:
- four embedded private roads owned by the POA that provide access to restaurants, and businesses
- two playgrounds with ball field, parking, equipment, picnic tables, etc
- 1.5 miles of "greenbelt" its paved walking path
- at least a mile of POA owned common area sidewalks

I me with our local insurance agent (broker) and he assures me the inspector for the insurance company inspected and our potential liabilities are covered.

My question - is there a commonly used process wherein an entity like the POA would engage a private, independent contractor to evaluate insurance liabilities? Like an insurance version of a Reserve Study?

Related questions:
- would warning signage about using at own risk be appropriate or legally useful?
- should this community have an Umbrella in addition to the usual liability insurance (agent recommended $1M umbrella to the last Board, but they turned it down - current cost is about $2,500/yr including D&O)

Appreciate your thoughts.
MelissaP1
(Alabama)

Posts:8396


08/05/2019 7:58 AM  
Some insurance companies offer "Group" insurance. Meaning they basically throw in coverages you may or may not need. You can't "opt out" on certain things. Like we don't own a car. The insurance covered a HOA vehicle. It was coverage "grouped in" with everything else. So you may not be able to "pick and choose" what coverages you want.

The umbrella policy is an option. The board decided it wasn't worth the additional expense to be covered by ALL the membership. An individual may be able to get similar insurance on a personal level if they feel the need. Having liability insurance to cover board members from being sued personally is one of the "benefits" of serving on a board. Choosing not to have it can open one up personally. Again a personal decision.

Former HOA President
SheliaH
(Indiana)

Posts:2621


08/05/2019 8:14 AM  
Did you ask your insurance agent about this? If so, what did he say?

I'm not aware of an insurance version of a reserve study, but HOAs can do a risk analysis to help determine policies and evaluate their insurance - here's an article I pulled up that can give you a start - http://www.hoamanagement.com/risk-management-for-your-homeowners-association/ In fact, why not ask your agent if it could do such an analysis for you - there may be a fee, but if it can save you thousands of dollars down the road, it's worth considering.

Regarding the signs, a number of issues could come into play - where are these signs being placed, what are you warning people about and how can you increase the change it (they) can be seen? You'd have to consider placement, keeping them away from plants that might obscure them and perhaps lighting it up at night. Again, another question to ask your agent - if he doesn't know, ask him to refer you to someone within the insurance company who might be able to answer the question. Surely, there's an underwriter who might be able to give you some tips.

As for your last question, I suspect the last board turned down the umbrella insurance for cost, but if director and officer coverage was part of that, they should have asked if it could be purchased separately - and bought it. This is definitely something your current board should revisit.
SheliaH
(Indiana)

Posts:2621


08/05/2019 8:18 AM  
One more thing regarding the signs - it wouldn't hurt to check with your city or county about any ordinances regarding signage. In my community, there are rules that may require a review by the zoning department. Even putting up a "no illegal dumping" sign on a dumpster shed requires permission. Our board treasurer (who gets really anal about illegal signs anyway) once described the process to me and I got a slight headache! I'm convinced the procedure was designed in part to give somebody in the zoning department something to do....
GenoS
(Florida)

Posts:3123


08/05/2019 6:34 PM  
We have a $10,000,000 Umbrella policy and the annual premium is right around $1,000. We have a lot less common property than you and about a third of the homes. I guess the devil is in the details.
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