Insurance Endorsements
An insurance endorsement (also called a "rider") is a provision added to, excluding or modifying coverage in an insurance policy. Common endorsements include:
- Blanket Coverage: eliminates separate schedules for buildings and structures.
- Contingent Liability: coverage for responsibility of others imposed by law or contract.
- Demolition Endorsement: covers the cost of tearing down a structure and removing the debris after a major loss.
- Employment Practices Liability (EPL): covers lawsuits filed against the association by employees for the association.
- Landscape Coverage: includes theft, vehicle damage, and wind damage.
- Replacement Cost: pays 100% of the cost of reconstruction, including code upgrades.
- Waiver of Subrogation: waives right to pursue recovery of damages from a unit owner (see definition).
Insurance Exclusions
Exclusions are perils, losses, and property not covered by the policy, such as wear and tear to the association's common areas or mold. Excluded perils might also include perils that could cause extensive damage, such as flood, earth movement, and nuclear radiation. Some of the common exclusions under CGL & D&O policies include:
- Breach of contract
- Election challenges
- Dishonesty, criminal acts, fraud
- Embezzlement (HOA can be covered by fidelity insurance but not the embezzler)
- Discrimination
- Sexual misconduct
- Employment claims (HOA can be covered by EPL insurance)
- Underinsured or failure to insure
- Punitive damages, fines, penalties
- Injunctive relief
ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.