The sun is shining on your association this

summer, and it is time to throw the bash of 2019! Everyone likes a good celebration, and your association should too. Whether the event is for a holiday like the 4th of July, a “50-year anniversary of Woodstock” event, a friendly get-together, or the annual association summer party, knowing how to better protect your household and association is vital to avoiding chaos. The key to a good party is the right protection. Let’s face it, things go wrong when we least expect it. Most traffic accidents happen five miles from home, and do you know why? This is because we are in a relaxed state, we envision ourselves home safe clear from damage. Our guard is down, and so is our preventative reaction. Let’s provide a deep dive into how we all can better prepare and protect the insurance provisions, and make a splash within your association.

The protection an association can put in place to prevent liability loss starts with the rules and regulations on community gatherings. Regulations can put limitations on noise control, alcohol, party size, and others. One type of regulation for an association party is the insurance guidelines required by each homeowner. Whether they are renting a community space such as a clubhouse, or simply having a birthday bash in or around their unit, guidelines must be declared to ensure the protection of the association’s liability in the event of an incident. This of course starts with the unit owner’s personal insurance. Though the association does have coverage inforce, the purpose is not to cover the negligence of all its residents and their guests.

Homeowners should be advised to check with their individual insurance company prior to renting out the community clubhouse, pool, or meeting room. If the homeowner’s policy will not extend liability to the space, a “Special Event” policy can be purchased. Insurance companies may not automatically extend coverage to events outside the walls of your home. They may not cover event based on size, location, alcohol, and business involvement. A Special Event Policy is designed to provide the same protection, but for only the one event. The association can still be listed as an additional insured, and furthermore protected. If the association has a meeting room, clubhouse, or picnic area setting these standards of occupancy is a great tool to preventing unnecessary claims on the association’s record.

The protection

an association can put in place to prevent liability loss starts with the rules and regulations on community gatherings.

We all don’t necessarily need a party to have a good time. Trampolines and tree swings may be just the thrill you need. Let’s not beat around the bush, any additional piece of recreational equipment creates a hindrance to the overall goals of the association. Everyone wants a nice safe place to call home, and even though the trampoline looks like a good time (Oh it is!), it creates risk to the association’s reserves and budget by way of insurance costs. As injury costs stack up, and insurance companies pay out for accidents, premiums will continue to rise. Homeowners can band together and prevent these claims from happening, by taking the kids to a party facility like Chuck-E-Cheese, rather than renting a bounce castle at their homes.

An H06 insurance policy or individual condo insurance is a binding policy that declares the homeowners liability. An association board and management can mandate that each unit owner purchase their own H06 policy insuring that individual’s liability coverage. The association can also request that the association be listed as additional insured to that individual’s policy. Therefore, if a loss occurs “within the walls” of that homeowner’s unit the association is additionally insured on that H06 policy. So when the clumsy friend falls backward while competing for the limbo crown at Becky’s 45th Birthday Jamboree, the association will be additionally covered under the homeowners’ insurance policy. If you are a manager or board member, this may be a regulation you may want to review with your insurance agent and legal department. Most insurance companies can place the association and/or management company on each unit-owner’s policy for free! Not only will your association be listed, but the company will send annual updates on that policy when it renews.

When it comes to liability, the association coverage will always be primary in common areas, unless listed otherwise in contract form. Insurance policies are in fact a contract, bound between company and individual, or company and association. When a contractor steps foot on the property, one of the prerequisites is to provide proof of insurance; this standard should not change when scheduling events. As a homeowner, we can better protect ourselves by reviewing our insurance, and identifying the standards set by the association. As a board member or manager, we can all review these standards and make certain that all guidelines are put in place for the betterment of our budget and safety.

The summer was made to be celebrated, pools were made for cannonballs, and candles were made to be blown out! Party on, but instill that same commitment in your preparation and protection. • 847.301.7505 | 19

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