Community Insider Winter 2017 - Page 41

be three months’ dues plus full reserve funds, though at times it may vary and require something like 150% of annual dues plus reserves. If the CC&Rs have no specific requirement, it is always advisable to insure all financial assets of the association. Notably, current Fannie Mae guidelines require three months’ dues plus reserves. Directors & Officers Liability (“D&O”). Similarly to General Liability, California Civil Code §5800 sets out certain minimums to protect board members from personal liability. That said, verify that the coverage limits are: At least $500,000 per occurrence for communities with 100 or fewer units At least $1,000,000 per occurrence for communities with more than 100 units 800.300.1704 | KNOWLEDGE 30 INTEGRITY COMMITMENT SUCCESS C E L E B R AT I N G Years Also verify with the bidders that the proposed coverage includes protections for discrimination claims, non-monetary damages and prior unknown acts coverage. These are important coverages that are left off of some policies and present unnecessary exposure. Workers Compensation. Common sense might say this coverage is only needed if an association has employees, though due to the Heiman v. Workers Compensation Appeals Board case in 2007, it is a good idea to review coverage. For communities without employees, the coverage is an inexpensive way to protect the association from liability for a vendor injury incident where the vendor’s own coverage unexpectedly cancelled without your knowledge. A good policy will also provide coverage for board members, committee members and volunteers if there is an incident while conducting association business. The value of not requesting “apples-to-apples” is that if your current coverage is inadequate or problematic, it will be pointed out and explained by other agents during the bid process. It also shifts responsibility onto the insurance professionals to advise on proper coverage as opposed to the board dictating coverage limits to the Brian A. Kalmenson, CIRMS, is a Commercial insurance professionals. Insurance Specialist with the Michael Abdou Insurance Agency, an agency that has specialized in community association insurance since 1989. On time spent getting a proper bid request together, fifteen minutes could save you fifteen headaches or more on your next insurance renewal. Putting the unity in community 1986 - 2016 Providing Solutions to Southern California Common Interest Development Legal Issues for over 30 years. Download our App to learn more! ASSOCIATION COUNSEL ASSESSMENT RECOVERY • CIVIL LITIGATION CONSTRUCTION DEFECT • RECONSTRUCTION SENIOR & FAIR HOUSING • APPELLATE At Walters Management, we believe in creating partnerships with the communities we serve by facilitating open communication and transparency in every aspect of our business. your community our commitment SAN DIEGO [800] 227- 6225 • C H U L A V I S TA • CARLSBAD • M U R R I E TA