In their roles as “risk managers”, your community association’s board will likely contract for insurance policies to protect against accidental losses to the assets owned by the association.

A hazard policy, for example, will protect the real and personal property such as buildings, docks and grounds from any losses sustained due to storm damage.

There are also personnel risks that occur when volunteers are injured while conducting association business, or, when an employee is injured on the job.

Your association may insure against possible loss of income, such as in the case of uncollectible assessments from a unit owner whose unit is damaged and uninhabitable, or, from the theft of association funds.

Another exposure is a loss from a successful liability claim where the association is held responsible for some “wrongdoing” that leads to property damage, bodily or personal injury on the part of the person making the claim. Examples would include an improperly maintained tree limb falling on a car, someone tripping and falling on a loose stair tread, or, the community newsletter inappropriately listing an owner as delinquent in the payment of their assessment.

Flagler Coastal managers recommend to association boards that they should conduct surveys, examine association financial statements, research historical records and maintenance files, make personal inspections and hire experts to minimize their risks.

We support our communities by avoiding circumstances that would expose the association to loss, such as prohibiting a child from using the pool without adult supervision. We will takes steps to reduce the frequency of a potential loss, for example, by completing weekly inspections of common area lights, or, to reduce the severity of a potential loss, by replacing burned out bulbs in common areas and exit sign lights. When possible, we will maintain backups for critical components, such as keeping a spare mechanical pump.

It may also be possible to enter into contracts that transfer some exposure and legal responsibility for losses such as contracting for elevator or pool maintenance services instead of using association employees.