Unlike individual apartment owners’ insurance coverage, most co-op and condo buildings’ insurance policies are pretty standard—they include homeowners’ insurance, liability, and umbrella coverage. Usually, the common areas such as the hallways, roofs, basements and so on are insured for liability and physical damage, and occasionally, the building’s insurance policy also covers the standard fixtures in each individual unit.
Just because most buildings have similar policies covering the basics doesn’t mean that’s all there is to be had in the way of coverage, however. There’s directors’ and officers’, or “D&O” insurance, which protects board members if they are sued in connection with their actions or decisions on behalf of the building. And nowadays, more and more boards and associations—not just lenders—require that the shareholders or condo owners carry their own homeowners’ insurance to protect their individual units.
Other types of insurance for co-ops and condo units can include coverage for sewer backups, natural disasters, employee thefts and even changes in municipal rules and regulations. Those are just a few of the more specialized types of insurance available that non-insurance professionals—including board members and managers—may not be familiar with. This article will take a look at some of these types of insurance.
Time to Go Green
To begin with, in today’s world of both residential and commercial buildings, “green” is the new byword (in the past, such buildings were merely called “energy-efficient.”) Insurance underwriters are jumping aboard the trend and offering several types of “green” coverage to multifamily buildings.
One, says Tim Earhart, vice president of Chubb Group of Insurance Companies, entails replacing a green building that has been destroyed by fire or other catastrophe with another green building—or replacing damaged portions of the building with equivalent environmentally advanced features. The second type pays to replace a damaged “regular” building with a green building, or upgrade a destroyed building’s green status (for example, from LEED Silver to LEED Gold) after a disaster.