SOURCE: Brightpoint Insurance Group

August 24, 2015 14:00 ET

Avoid Disaster: Brightpoint Insurance Shares 5 Tips for Condominium Associations

SAN FRANCISCO, CA--(Marketwired - August 24, 2015) - When disaster strikes a condominium building the misery is shared among the owners, board of directors, and most of all the community manager. Implementing a program to reduce the likelihood of experiencing one of these horrible, and thankfully rather uncommon occurrences is of the utmost importance. These five tips will help you successfully avoid pitfalls that can lead to disaster.

1. Make sure your volunteers are covered. Volunteers include the board of directors, helpful residents, and anyone who is performing a job on behalf of the association without receiving compensation. Volunteers are often covered under a special endorsement in the association’s Workers' Compensation policy. However, careful review of the association's insurance policy is imperative as this is not always the case. As an alternative an association can purchase a volunteer accident policy to cover any accidents involving volunteers.

2. Educate owners about their insurance responsibilities. The most common insurance issues occur after a small loss when a unit owner and an association disagree on whom should be the responsible party. To avoid these contentious situations it is extremely important that unit owners purchase a policy with the correct coverage and are informed about who is responsible for paying the deductible in the event of a loss.

3. Eliminate water damage. One of the most common insurance claims for condominium associations is water damage. Whether it is a negligent resident, a leaky pipe, or an overflowing toilet these claims can be rather large, especially for high-rise buildings. Some associations are installing water detection hardware such as RDT’s RS-360 system to immediately notify maintenance in the event of a leak. While these systems tend to be rather expensive they can help reduce insurance and litigation costs especially if water damage is a recurring problem for the property.

4. Make sure your boiler & machinery are covered. This coverage is rather inexpensive and is very important for condominium associations as it covers mechanical breakdown for the elevator, air-conditioning unit, boiler, security system, telecom system, and all other machinery. Associations that don't have this coverage may impose a special assessment for homeowners if any one of these machines breaks down.

5. When disaster strikes make sure your association can re-build. If your condominium building experiences a loss, the insurance policy will pay for the portion of the building that is destroyed. Your local building code, however, may require you to demolish the portion of the building not subject to the loss and construct an entirely new building. If your association does not have law & ordinance coverage they will have to cover not only the increased cost of demolition, but also the cost to re-build the portion of the building that was not covered by the insurance company as a result of the initial loss. This can be a major problem.

About Brightpoint Insurance Solutions

Brightpoint Insurance Solutions is a leading provider of risk management and insurance solutions for community associations, including Homeowners Associations, High-rise Condominium Associations, and Property Owners Associations. The company's innovative approach to the insurance markets and sophisticated risk management strategies enable community associations to reduce risk, cut insurance costs, and provide a happy and healthy environment for owners. Visit Brightpoint Insurance. Follow us on Twitter and LinkedIn.

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