Excess Liability Insurance and Umbrella Insurance for Homeowner Associations
Excess Liability Insurance for Homeowner Associations is typically a policy that provides “following form” coverage which essentially means higher limits of coverage based on the same type of coverage provided by the underlying General Liability or Directors and Officers policy. An Umbrella Policy also provides higher limits, but may provide broader or less coverage than the underlying policies.
Umbrella insurance is designed to help pay law suit legal defense costs or judgments for high value law suits which exceed the underlying limits of General Liability or Directors and Officers coverage. These types of claims are often-times based on serious bodily injury or death cases. Examples of high-value law suits might include a toddler who drowns in the association’s swimming pool, a serious injury due to falling down the stairs or if a Board Member injures another person in an auto accident while driving on association business such as while picking up walkway light bulbs at the local hardware store.
If possible, Umbrella Policies for homeowner associations should always be excess over the General Liability and Directors and Officers insurance policies and should include the Community Manger as an Additional Insured.