The master property policy
Covers the building's common elements against fire, water, storm and similar perils, usually at replacement cost. Two things to verify every renewal: that the insured value tracks current rebuilding cost rather than a figure set years ago, and exactly where the policy's coverage stops inside each unit — bare walls, original fixtures, or as-built.
General liability
Covers injury and property damage in the common parts: the slip on the wet lobby floor, the branch that falls on a car. Check the limit against the size and use of the building, and check whether board members are named as insureds.
Directors and officers (D&O)
Covers the board's defence when an owner sues over a decision. Without it, board members are exposed personally to legal costs even when they win. Confirm it covers volunteer board members specifically, and that it is not voided by the association being self-managed.
Fidelity bond / crime cover
Covers theft of association funds by whoever handles them. In a self-managed association the board handles the money, so the bond should at least cover the maximum funds accessible at any time, including reserves.
What owners insure themselves
- Everything inside the unit that the master policy excludes — typically finishes, improvements and contents.
- Personal liability for damage originating in their unit.
- Loss assessment cover, which pays their share of an association deductible or shortfall.
- Tell owners in writing what the master policy does and does not cover; most disputes come from owners assuming it covers more.
An annual insurance check
- Has the rebuilding cost been reviewed this year?
- Do the deductibles still make sense against the reserve balance?
- Is D&O in force and does it name volunteer directors?
- Is the fidelity bond at least equal to accessible funds?
- Have owners been told what they must insure themselves?
Questions fréquentes
Does the association's master policy cover the inside of my unit?
Usually only partly. Most policies stop at a defined boundary — bare walls, original fixtures, or as-built condition — and everything beyond it is the owner's responsibility. Read the boundary clause; it is the source of nearly every claim dispute.
Who pays the master policy deductible?
It depends on the governing documents and local statute. Many associations allocate it to the unit where the loss originated where the documents allow, but that must be written policy, not an ad-hoc decision after a claim.
Do we need D&O insurance if we are a small building?
Yes. Size does not reduce the risk of an owner challenging a board decision, and defence costs are the same for a six-unit building as a sixty-unit one.