Ins for High-Risk Assns
Adams Stirling PLC
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INSURING LITIGIOUS ASSOCIATIONS

QUESTION: Our association has been sued several times by one of the members. The legal fees have been substantial and the board is concerned they may lose their directors insurance. Do you know if there is a "high risk" insurance pool for homeowner associations?

ANSWER: Associations that lose their insurance because of repeated litigation from problem owners can still get insurance through "excess and surplus lines" carriers. However, coverage will be limited, deductibles high, and premiums significant. Carriers that write "hard to place" accounts will likely be non-admitted carriers. Moreover, they may exclude known problems, such as actions filed by recognized litigious owners. Your association could anticipate paying higher premiums for about three years until your loss history improves. Once you've had no claims for three years, your insurance broker should be able to move you back to a preferred market carrier.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

Adams Stirling PLC