The Top 10 Association Insurance Questions - Part 6

Today we discuss the sixth installment of "The Top 10 Questions asked by Board Members and Community Managers Regarding HOA and Condo Association Insurance." 

By: Brian J. Finnerty (CIC), Area Sr. Vice President, Arthur J. Gallagher Risk Management Services

Question 6:
What is an Umbrella Policy?  

An umbrella policy is a policy that provides excess liability limits above and beyond what they have on their general liability policy, auto liability, directors and officer’s liability, employers’ liability, or any other liability policy the carrier has approved to have the umbrella extend over. 

I like to call this “sleep at night” coverage.  Everyone has a different opinion of what the right limit is to carry.  In some cases your governing documents will suggest what limits you must carry and in other cases the discretion of the board is the driver of what is the right limit to carry.  My suggestion is always to at least get a quote.  These policies are more affordable than you might think.  If you have a pool or other amenities that make your association more prone to a large claim then you may want to look at getting higher limits of liability.  When there is the potential of a large claim this is the policy that can protect you.

Be sure to check back next week for Question 7!