Association governing documents along with some guidance from the North Carolina General Statutes require that a homeowners’, property owners’ or condominium owners’ association carry insurance to cover losses (at least direct physical loss to the common areas or elements). Recent court decisions have interpreted language regarding condominium association obligations and many associations have questions and need guidance regarding required coverage versus desirable (or otherwise appropriate) coverages. For instance, while not always mandatory per the governing documents, many associations carry directors’ and officers’ liability insurance so that members will agree to serve on the Board.
Key points for Association Boards and Property Managers who assist them:
- There is no standard or catch-all answer for every Association. Considerations, including recent case law may affect a board’s decision about selecting appropriate coverage.
- Association boards should analyze insurance needs with business judgment and appropriate guidance on a regular basis.
- Association boards should consult and rely upon professionals for guidance with consistency of opinion being obtained from manager, insurance adviser and an attorney familiar with the association and its needs.
Shipman & Wright, LLP has lawyers with extensive experience and practice knowledge to assist community association boards both large and small with a variety of services to include analysis of governing documents, turnover and elections issues, enforcement actions, dues collections and liens, zoning and title matters, and general guidance on insurance, management, meetings and case law updates.