While most insurance is attached to a physical object or person, errors and omissions insurance is a little more abstract. Nonetheless, it’s very important that service-based businesses invest in E&O.
CONDO BOARD INSURANCE COVERAGE EXPLAINED
It’s important for condo boards in Alberta to have a strong insurance policy in place. Legally, condominium corporations must have comprehensive insurance. This protects the corporation, the board members, and the condo owners from damages.
According to Condo Law Alberta:
A condominium corporation is required to maintain insurance to protect common property and condominium units (in conventional condominiums) against loss resulting from destruction or damage. The condo corporation must also maintain insurance against liabilities incurred by board members and the corporation itself in carrying out their duties.
Condo board insurance is highly complex. That’s why it’s very important to seek out the expertise of an experienced insurance broker. Individual board members may also choose to independently review the policy. This way, board members can understand and lower their personal risk.
THE DIFFERENCE BETWEEN CONDO INSURANCE AND CONDO BOARD INSURANCE
What makes insurance for condos difficult is the distribution of risk. Risk is split between unit owners and the condo corporation. For that reason, it’s important to understand the different types of policies the cover condos.
CONDO INSURANCE
Tenant insurance or condo insurance is typically a personal policy purchased by unit owners. It covers the individual unit, which is the personal property of the owner. It does not cover the common property of the building.
Some incidents may not be fully covered by the condo corporation’s insurance. In this case, costs for repairs and replacement may be assigned to unit owners, or split between owners. Additional loss assessment coverage can be purchased with a personal condo insurance policy. This can guard against any gaps or limits to the corporation’s master insurance policy,
CONDOMINIUM BOARD INSURANCE
Condo board insurance is much broader than condo insurance. This is a commercial policy. It protects unit owners, the corporation, the condo board, and any other people or organizations that may be at risk.
Condominium boards insurance applies to the common areas of the property. This ensures that if an incident occurs within shared areas, the damages will be insured.
SHARING RISK
Condo board insurance in Alberta is complicated. It requires a balance of risk between individual unit owners and the board. When a pipe bursts in a unit and affects other units, who is responsible for paying deductibles? The master insurance policy? The unit owner’s insurance policy? The corporation? The reserve funds?
These are the questions a qualified insurance company in Alberta will help you determine for your condo board policy. Cornerstone Insurance brokers walk our clients through a full interview process to ensure their coverage is tailored and accurate. All of these questions are answered and determined before the policy is written.
Condo boards have a responsibility for ensuring unit owners understand their portion of the risk assumed. Condo boards must release policy details to owners, and inform them of any changes. This way, owners can obtain their own coverage and be financially prepared for any events.
INSURANCE DEDUCTIBLES FOR CONDO OWNERS
Typically, condo board insurance coverage only applies to the shared areas of the buildings. This may include elevators, lobbies, hallways, walkways, outdoor areas, and gyms or pools.
However, some condominium boards opt to include deductible coverage for unit owners. In other cases, condo owners are expected to pay any deductibles for damages to or from their own units.
CONSTRUCTION VERSUS COMPLETION PHASES
During the construction of a condominium building, a different type of insurance is required. Before the condo board and unit owners have assumed the risk, it lies with developers and construction companies. For more information on builders’ risk policies, please see Cornerstone Insurance Edmonton’s construction and trades insurance page.
WHAT KIND OF COVERAGE IS NEEDED?
Property insurance and liability insurance are requirements for condo corporations. These protect against harm to the property or harm to people on the property.
Directors & officers liability insurance protects board members. Because members are representing other people, they are exposed to more risk. Experienced insurance brokers provide a policy to protect the board and corporation, as well as individual board members.
SOLID PROTECTION & SOUND ADVICE FOR CONDO BOARDS
At Cornerstone Insurance, we offer solid protection and sound advice for every business client we serve. That’s why we’re a top choice for business owners in Alberta! You’ll receive a free condo board insurance quote and professional services from a qualified insurance broker. If you need help with your condo board insurance, general liability insurance, or any other commercial insurance policy in Alberta, please get in touch with us.
