Your Neighborhood Law Firm

What can your HOA master insurance cover?

When the homeowners association (HOA) performs its duties properly, the benefits can extend to the residents, the property they live in and the people working in the association. The same can be true when the HOA obtains insurance coverage. Whether a condominium building or a gated community, these properties may need specific types of insurance to address costs associated with distinct kinds of damages.

These issues can have legal implications, making liability vague and confusing depending on the situation. But with HOA master insurance, the residents and the association can rest easy, considering that this policy type can have inclusions covering specific areas and other causes for damages, including the following:

  • Damages sustained by shared areas and amenities, such as the lobby, gym, pool and other parts of the property that all residents can use
  • Liability coverage for legal actions against HOA directors, such as contract breaches or discrimination claims
  • Workers’ compensation when employees suffer injuries while working
  • Dishonesty, such as theft by an employee from a resident
  • General liability that can cover third-party injuries within the property

However, these coverages may only apply according to the type of policy acquired by the HOA. The options can range from basic to all-inclusive policies, affecting the insurance’s coverage.

Understanding how HOA insurance works

It can be challenging for HOAs to decide what type of insurance to obtain. In some cases, HOA insurance alone can have gaps, making the community vulnerable to specific damages. Additional insurance policies can be helpful but could incur unnecessary costs if done inappropriately. When faced with these issues, seeking legal counsel can be beneficial. Experienced insight into insurance terms and technicalities can help HOAs make informed and effective decisions in the best interests of the entire community.