"The time to start thinking about wildfire preparations is now, because if you wait until the weather warms up, it is already too late."
association from bad decisions of the board? Each and every decision made by the board leading up to a wildfire will be put under a powerful microscope by anyone sustaining damage.
To prepare, a board should consult experts and work out a plan to address potential contributing factors to the spread of a wildfire. For example, talk to the local fire authority, or the California Fire Authority (Cal Fire;
www.fire.ca.gov). Work with community management and legal counsel to document the steps taken, or not taken, and the reasons behind each decision. There is nothing that can be done to completely avoid a lawsuit. But you can put the board in the best position possible to defend against one by finding out what the carrier requires to mitigate exposure, implementing steps to reduce these risks, and documenting everything. This will give confidence to the insurance carrier that the board of directors is doing things correctly and make the carrier more likely to bind or renew coverage.
As wildfire seasons in California are only getting worse each year, insurance carriers are becoming more stringent in their requirements to maintain coverage. In fact, some associations are being non-renewed notjust by their property damage carrier, but by their D&O carrier if the community is in a designated high-risk wildfire zone. You should be aware of whether your community is in one of these zones. Being in one of these zones might be enough to scare off a carrier from renewing coverage, afraid of the possibility of a wave of litigation after the wildfire has been extinguished that the carrier is now forced to defend. You will want to contact the representatives with the carriers now to find out all the requirements the carrier has in order to maintain the current coverage and improve your chances of having your insurance coverage renewed when the renewal date arrives. Giving the carrier confidence that, even being in a high-risk wildfire zone, the board of directors has taken all steps necessary to mitigate exposure can be the determining factor when the carrier decides whether to renew coverage.
The worst position a board or manager can be in is scrambling to find insurance coverage for a community in the middle of a high-risk wildfire zone, right in the middle of August, because your current carrier declined to renew. So set down that cup of coffee and start planning for the time when a wildfire will threaten your community.
www.caioc.org
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