Condominiums Need Supplemental Legal Defense Insurance
Your condo association needs a BOLD Supplemental Defense Insurance Policy for several important reasons. Standard insurance policies have many gaps and loopholes which BOLD will help fill in. Even if a lawsuit is ultimately found to be without merit, the cost associated with a legal defense can be substantial. Supplemental defense insurance helps cover these expenses, protecting the association’s finances.
Condominium Risks
Condo associations can face various liability claims, including those related to certain personal injury incidents, property damage, environmental hazards, breach of contract, subrogation, natural disasters, and many more. A supplemental defense insurance policy ensures the association is protected when their primary insurance carrier denies coverage, limits coverage or doesn’t respond in a timely manner. For example, if a lawsuit is filed against your association and an answer is not received by the court within the 20-day limit, a default may be entered against the association. If this situation arises, you may be liable for monetary damages and face additional legal consequences.
Protection for Board Members
Board members make decisions that can lead to legal challenges from residents or third-parties. A supplemental legal defense insurance policy can help protect the board members when the directors and officers (D&O) policy excludes liability for any reason they deem appropriate. BOLD will protect the board members, allowing them to serve in their official capacity until any issues are resolved. Furthermore, this protection is essential for maintaining the board’s effectiveness and confidence in their decision-making process.
Comprehensive Coverage is an Important Part of a Risk Management Portfolio
By having a BOLD policy, the condo association can maintain financial stability by avoiding the need to raise assessments or dip into the reserves to cover unexpected legal expenses. Comprehensive coverage is an integral part of a risk management portfolio for condominium associations, providing essential protection for the property and its governance structure, ultimately safeguarding the interests of all stakeholders involved.