Amenities can define a community.  If golf or nature or other features attract residents, both residents and their guests take advantage of the opportunities such features offer.  In some communities, certain activities may be open to the public or facilities may be rented out for events. 

These same amenities that bring positive attention to a community also invite liability.  Poorly putted golf balls, improperly connected wiring for speakers, and even wildlife mishaps are some of the many unintended consequences that can wreak financial havoc for a community. 

You may think you are safe because you have general liability insurance.  However, the mere existence of such insurance doesn’t mean you are fully protected or even protected at all. Language in your Governing Documents and waivers of liability may offer some protection, but, often, some of the first questions asked in the aftermath of an accident are:  Who is your insurance carrier?  What are your limits?

According to Tony Cannizzaro, an agent with First Commercial Insurance, general liability policies for condominium or homeowners associations should cover all Association Property.  The definition of Association Property may be spelled out in the policy and may differ from definition that is in an Association’s Governing Documents.  If there is an Association golf course, is it owned by the Association or a separate corporation?  Is there coverage on the Association’s general liability policy or is there a separate policy?  If the course is owned by a separate corporation, is the Association a named insured?

As for common rooms, such as event or meeting rooms, general liability policies should already include coverage for Association-hosted events or meetings.  However, many Associations rent out those rooms to private groups, whether member-hosted or leased to a third party.  In such case, Cannizzaro recommends that Associations require hosts to obtain special events policies, which include the Association as a named insured.  Some factors to consider include the number of guests and whether alcohol will be served.  Many special events policies already include liquor liability, but it is prudent to confirm coverage with the insurance agent.  Even victims of accidents caused by drunk drivers could follow the trail of liability back to the party in the Association clubhouse and seek compensation from the Association.

As such, it is always important to know what amenities or events your policy covers.  Many Association insurance policies don’t automatically cover special events, even if the event is hosted by the Association.  When an Association asks its insurance company to add coverage for an event, insurers usually want to know if amusement devices will be there.   If so, insurers “will not add that event or they will add the event and exclude the amusement device from the policy.  The Association would then have to buy a separate special event policy” for the amusement device, according to Cannizzaro.  In the event the insurance company does add the event and excludes the amusement device, Cannizzaro recommends that the Association require the amusement device operator to name the Association as an Additional Insured with a Waiver of Subrogation.

Based on these risks, periodic policy reviews are recommended to determine whether an Association is adequately protected.