Community Association Insurance Programs

(Illinois)

  Insurance Requirements of the Illinois Condominium Property Act

 Summary of Essential Insurance Coverages

 Choosing Risk Management Partners For Your Association

Insuring Your Association

Insurance Requirements Illinois Condominium Property Act   Property Insurance Including Full Replacement Cost Coverage

For The Building Including Coverage For The Increased Costs Of Construction Due To Building Code Requirements.

  General Liability Insurance With A Limit Of No Less Than $1,000,000.

  Directors & Officers Liability Insurance.

  Employee Dishonesty Insurance With A Limit No Less Than The Total Of The Association Operating Funds And Its Reserves – Mandatory For Associations With 6 or More Units.

  Contractors And Vendors (Except Public Utilities) Doing Business With A Condominium Association Under Contracts Exceeding $10,000 Per Year Must Provide Certificates Of Insurance Naming The Association, Its Board Of Directors, And Its Managing Agent As Additional Insured Parties.

Insurance Requirements Illinois Condominium Property Act   Authorizes the Board to Require Unit Owner Insurance and Any

Other Insurance Deemed To Be In The Association’s, Unit Owners’ or Boards Best Interest – i.e. Workers Compensation, Employment Related Practices, Equipment Breakdown, others.

  Mandatory Property Manager Coverage on Association’s Policy For Employee Dishonesty AND Manager is Required To Insure Themselves

  Unit Owners and the Association waive their rights to subrogation (can not collect from another party for damages paid on behalf of an insured).

Source: IL Condo Property Act, 605/12 Insurance 6/1/02

Summary – Commercial Property

  Buildings / Real Property

  Business Personal Property

  Business Income

  Building Ordinance Or Law

  Equipment Breakdown

  Sewer Or Drain Back Up

  Flood

  Earthquake

  Enhancement Endorsements

Property Insurance Responsibilities Association Responsibility

Common Elements

  Structure, All Common Areas, Bare Walls, Primer, Floors & Ceilings of “The Unit”

Limited Common Elements

  Balconies, Terraces, Patios, Parking, Exterior Windows & Doors

Unit Owner Responsibility

Always

  Carpeting, Floor Coverings, Wall Coverings (including paint but not primer), Bathroom Tile, Molding & Trim

Usually

  Appliances, Light Fixtures, Kitchen and Bath Cabinets, Sinks, Bathtubs, Showers, Faucets, Countertops and Anything Else That Has Been Added To The Bare Walls

Sometimes

  The Inside of Your Walls Too - If They Only Service Your Unit

The Above Reflects Responsibilities As Defined By The IL Condo Act, 605/12 Insurance 6/1/02 Responsibilities May Vary Depending On How They Are Defined In The Association’s By-Laws.

General Liability

  General Liability Covers Damages The Association Is Legally Obligated To Pay Due To Bodily Injury or Property Damage Resulting From The Association’s Negligence.

  Medical Payments Coverage Provides A Limited Amount Coverage For Bodily Injury Caused By An Accident Regardless Of Fault.

  Garagekeepers Legal Liability May Be Necessary For Associations With Valet Parking – Even If Only On Special Occasions.

Crime Insurance

  Crime Insurance Coverages:

  Fidelity / Employee Dishonesty: Minimum Insurance = Maximum Amount In Both Operating and Reserve Accounts - Total

  Forgery Or Alteration

  Money & Securities   On & Off Premises

  Computer Fraud

Directors & Officers’ Liability   Errors And Omissions Insurance

For Claims Made Against The Association Regarding Directors And Officers Alleged Wrongful Or Negligent Actions (Or Inactions).

  Does Your D&O Policy Include Defense Inside or Outside The Limits?

  Is There An Exclusion For Failure to Maintain Insurance?

  Are Employment Related Practices Covered?   Wrongful Termination, Sexual

Harassment, Discrimination

Additional Coverages Available:

  Breach of Contract

  Property Managers

  Spouses

  Committee Members

  Volunteers

  Non-Monetary Damages*

* More than half of claims filed are for non-monetary damages.

Commercial Auto

  Even If The Association Does Not Own Any Automobiles, It Could Be At Risk For An Auto Related Claim.

  Automobile Liability Is Excluded From The General Liability Policy Unless Hired & Non-Owned Auto Liability Coverage Is Purchased.

  $1,000,000 Of Hired & Non-Owned Auto Liability Usually Costs Less Than $250 Per Year.

Workers’ Compensation

  Part One Of This Insurance Policy Provides Coverage To An Injured Employee For Medical Payments, Lost Income And Permanent Or Temporary Disability.

  Part Two Provides Coverage To The Association For Lawsuits Alleging Negligence Causing A Work Related Injury.

  The Association Could Be Liable For Injuries To Uninsured Contractors, Volunteers and Board Members.

Commercial Umbrella

  Additional Liability Limits Are Available Through An Umbrella Policy. This Policy Can Extend Over Existing General Liability, Auto Liability, D&O Liability And Employers Liability Policies.

  Not All Umbrella Policies Are Created Equal. For Example, Some Will Not Extend Over D&O.

  In Today’s Legal Environment, $1,000,000 Of Insurance Coverage May Not Be Enough.

Choosing A Risk Consultant ILCPAExper,se

MarketAvailabilityAndRela,onships

ProAc,veRiskTransferPrograms

RegularClaimsReviews

BoardMee,ngAvailability

EarlyandComprehensive

Renewals

CommunityAssocia,onSpecialists

Insurance Company Consideration

FinancialRa,ng

AMBestCompany:A‐orBeHer

Programs

CommunityAssocia,onSpecialty

CoverageEnhancements

BeyondBasic

BuildingCoverage

ClaimsHandling

24/7Repor,ng

Payment

PaymentPlansor3rd

PartyFinancing