Community Insurance | What To Do When There Is A Claim
You work hard and are proud of the job you do for your community. When it comes to community insurance, you have made sure the community has the important coverages in place. Here’s a brief review of what those coverages are: Commercial General Liability protects against claims others make against the association.
The policy provides coverages for bodily injury, property damage, personal injury and advertising liability. Homeowners are included as additional insureds. There is usually no deductible. This insurance is often combined with the property coverage in a package policy.
- Non-owned auto liability responds in case someone who is driving on behalf of the community is involved in an accident and doesn’t have enough insurance to pay for all of the damages.
- Directors & Officers (D&O) liability protects the association and its directors for claims alleging mismanagement. Coverage is provided for claims made against the community during the policy period, subject to the ‘prior acts’ date.
- An umbrella policy provides additional limits of insurance for liability claims. You’ve done a great job because you requested that this coverage extends to all three liability policies.
- Commercial property coverage protects the community’s commonly owned property. You’ve made sure the property is insured for its full replacement value and have reviewed the deductibles with an eye on the community's budget.
- Fidelity/Crime coverage protects against the theft of funds by an employee or volunteer. Even though you may manage the community’s bank account, you know the association needs this insurance in the event a volunteer diverts funds through the use of a phony invoice.
- They even have a Workers’ Compensation policy – because an association can have an exposure even without any employees. Here’s a case in point. An employee of an uninsured vendor was badly hurt. The California Appeals Board ruled that the association and its managing agent were both responsible for paying state-mandated benefits. (Heiman v Workers’ Compensation Appeals Board)
And, finally, you have Certificates of Insurance to assist you in a quick review of the policies.
But now, here comes the dreaded news – there’s been a claim! What should you do? Claim handling steps can be broken down into finding out what, when, where, who and how.
What happened? Get as complete a description as possible. By clarifying what happened, you’ll be able to determine which policy or policies to file the claim under. Take all necessary steps to prevent further loss or damage. If a vendor needs to install plywood over a broken window or tack a tarp over the hole, don’t wait for an adjuster – go ahead with the work. Hang on to the receipts as this is part of the total claim.When did it happen? The date of the loss is important because it will likely govern which policy will respond. If it is a straightforward property loss such as a fire or it’s a commercial general liability loss like a slip and fall, the policy that will respond is the one in force when the accident happened. This may not be the current policy. Sometimes we only find out about a loss when the claim arrives – which may be days, weeks, months or even years after the event happened. Perhaps someone fell in the parking lot and the board didn’t find out about it until the lawsuit arrived. Or, you just learned a pipe in the wall of a condo unit has been leaking water for the past several months. That claim might involve more than one policy. So make sure you have insurance policy information for prior years.
The answer to ‘when’ under the Directors & Officers policy is a little different. The general definition of a claim is a written demand or notice of civil or criminal proceeding. So for this type of loss, when did you or the board receive it?
Where did it happen? Is there a specific address or just a couple of intersecting streets?
Who caused the accident? If possible, get the names and contact information of everyone involved. Was anyone hurt? We're the police, fire department or EMT’s contacted? If yes, identify which one(s) and get the report number.
Then, evaluate the information you’ve gathered. If it is a property loss, first review the estimated cost to repair the damage against the policy deductible. If the loss is under that amount, you may not want to report it. Also remember that insurance policies are not maintenance contracts. Rebuilding an entry monument crumbling from age will not be covered by insurance.
Always report an accident when someone gets hurt on the community’s property – even if the injuries appear to be minor.
Finally, how do you report it? Contact the association’s insurance agent. Have the above facts at hand. You can expect the insurance company to provide the name and contact information for the adjuster within a day or two.
Once you have gathered information and reported the loss, you’ll be proud because you can work with the board and the adjuster to get the claim on the way to being settled.
Interested in receiving a quote for community association insurance? Contact CiraConnect Insurance Services today!