W
hen warm weather rolls around, community living starts to buzz with activity. Condominium boards, homeowner’s associations (HOAs), and cooperative housing corporations often embrace the summer season with festive events like barbecues, pool parties, Fourth of July firework shows, and even full-blown neighborhood carnivals. While these gatherings foster community spirit, they also come with risk, and often more than board members might realize.
Understanding what’s covered under standard insurance policies and where extra protection might be needed is critical for avoiding costly surprises. From bouncy houses to backyard fireworks, let’s dive into the insurance concerns that should be top of mind for HOAs and community association boards during the summer.
The Basics: What’s Typically Covered?
Most HOAs, condos and co-ops carry a General Liability (GL) policy as part of their standard insurance coverage. This policy generally provides protection against bodily injury or property damage claims that occur on common areas: think sidewalks, parks, pools, and clubhouses.
Additionally, the associations likely hold Directors and Officers (D&O) insurance, protecting board members from legal actions related to decisions made in their official capacity, and property insurance to cover damages to shared structures.
When it comes to regular social events like casual BBQs or board-hosted community meetings, these basic policies might be sufficient. However, as events become more elaborate – especially when entertainment, alcohol, or temporary installations are involved – the potential liabilities increase, and standard coverage may fall short.
Red Flag Events: When Basic Policies Aren’t Enough
1. Serving Alcohol
Events that involve serving alcohol, whether a BYOB neighborhood mixer or an HOA-hosted wine tasting. present a heightened risk of injury or liability. Most general liability policies exclude liquor liability, particularly if alcohol is sold or served by the organization.
Solution: Purchase a host liquor liability policy, which provides coverage for alcohol-related incidents when alcohol is provided without charge. If alcohol is being sold, the event may require a liquor liability endorsement or a separate policy altogether. Hiring a licensed bartender with their own insurance is another way to transfer risk.
2. Fireworks Displays
Fireworks are a classic summer staple, but also a legal and liability minefield. Injuries, fires, and noise complaints can quickly turn a festive night into a legal nightmare. Many insurers exclude firework-related damage or require special approval in advance.
Solution: If fireworks are part of the plan, boards should:
• Hire a licensed, insured professional pyrotechnics company.
• Require the vendor to provide a certificate of insurance (COI) with the association named as additional insured.
• Check local ordinances and obtain necessary permits.
• Consider an event-specific liability policy if not already included in the general coverage.
3. Bouncy Houses and Inflatable Rides Inflatables like bouncy houses, slides, or obstacle courses are increasingly popular at family-oriented summer events. However, they are among the most frequently excluded items in standard HOA and community association liability policies due to their high injury risk.
Solution:
• Require the inflatable providing vendors to show proof of insurance and list the HOA as additional insured.
• Never allow residents to bring or set up inflatables independently.
• Supervision should be continuous and provided by trained staff, either hired or supplied by the vendor.
• In some cases, a special event rider may be necessary to bridge any coverage gaps.
4. Pools and Pool Parties
Even with lifeguards present, pool events come with a high level of inherent risk. Drownings, slip-and-fall accidents, and injuries from diving or roughhousing can all result in liability claims.
Solution:
• Verify that the HOA’s general liability policy includes pool coverage, including events. • Enforce clear safety rules and post signage. • Require lifeguards during any organized event.
• Consider additional umbrella or excess liability coverage to increase the protection limits.
cai-illinois.org • 847.301.7505 | 19
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64
