There are plenty of conveniences and considerations that are nice-to-haves when it comes to your condo corporation. Proper insurance coverage, though? That’s a must-have, full stop.
“Condo board insurance?” you might find yourself wondering. “Really? What, in case a board member gets a paper cut while taking meeting minutes?” Well, no, obviously – most modern boards out there take their minutes digitally, so paper cuts no longer represent the rampant threat they once did!
To speak seriously, though, there are several reasons why condo board insurance is necessary for any properly-operating condo corporation. so, let’s dig right in and learn a bit more.
Five Key Things to Know About Condo Board Insurance
1. It’s the Law
Just like when you get behind the wheel of a car, maintaining an active condo corporation insurance policy isn’t a choice .it’s required by Alberta law. This makes good sense when you break it all down. Condo board insurance is a commercial-style policy that covers not just active board members, but unit owners, the corporation as a whole. And any other people or organizations that may find themselves at risk in association with the condo community.
This type of policy protects the common, shared spaces within your condo building . It ensures that coverage is there if anything happens in these areas.
2. The Master Policy Has All the Deets You’re After
Now, if you just read that previous section, blinked, and thought, “Wait…so, what exactly is covered by condo corporation, then?”, know that you’re not alone! A lot of this sort of language can start to sound pretty broad and “insurance-y” pretty quick. This is why condo boards work to create a document called a master policy that clearly defines what is and isn’t covered by the condo corporation’s insurance policy.
Generally, master policies will specify coverage for structures and common areas of the building and standard unit coverage and insurance for liability. personal injuries (so long as they happen in a shared space).
In the meantime, let’s take a look at another facet of insurance. your board should take a moment to familiarize itself with: directors’ and officers’ insurance.
3. Wait…MORE Insurance?
Adding an additional layer of protection to your typical, garden-variety condo corporation insurance is directors. officers liability insurance (or D&O insurance) – something that every condo board out there should look at having in place. For the uninitiated, D&O insurance protects condo boards. Board members in the unfortunate event that they end up facing a lawsuit within the scope of their position and authority.
Now, you might find yourself thinking, “Well, we already have condo corporation insurance…do we really need D&O coverage, too?” and to that, we shout from the rooftops: YES! Yes, you absolutely need D&O insurance. Even if your board is the most careful, capable, conscientious team to ever oversee a condo community, you can’t account for the sorts of people or the types of trouble you might run into. And, having to hire a legal defense team (even for a winning case) can be an incredibly costly affair.
4. Okay, But Do We Need Directors and Officers Insurance?
When it comes right down to it, no, you probably don’t need Directors and Officers Insurance – but on the other hand…you just might?
Allow us to explain.
Unlike condo corporation insurance mentioned above, D&O Insurance isn’t mandated by any sort of municipal or provincial legislation. However, many condo corporations have specific clauses in their bylaws requiring boards to maintain proper D&O coverage for members. So for some condo boards out there, lack of coverage might not even be an option.
And honestly, for everyone else out there: save yourself the stress, the heartache, and the potential financial trouble. If you’re an acting member on a condo board, do yourself a favour and insist that the board invest immediately in a D&O insurance plan.
5. If You Don’t Know, Ask!
Condo corporation insurance is one of those things that might seem nebulous daunting and intimidating initially. But once you dig in and start rocking the jargon, as the kids (probably??) say, you’ll begin to grasp the ins and outs in no time.
Beyond that, if you’re still feeling confused about whether your corporation has the coverage it needs or whether one policy might be better for your building than another, just ask!
Whether you reach out to your current condo management company or us at Catalyst Condo Management. Simply taking the time to educate yourself will prepare you to help your board make wise, informed decisions.
Have more questions about condo corporation insurance? Wonder what sort of coverage is right for you? Get in touch with us at Catalyst Condo Management to learn more – we’re always happy to chat!