The purpose of this coverage is to protect the association from liability imposed by law from bodily injury and property damage occurrences, both on your association property and away from the premises. The insurance company also has the duty to defend the association against any claim which alleges injury or seeks damages regardless of whether the association is negligent.
In Georgia, the Georgia Condominium Act (Insurance Required Section) states that “A liability insurance policy or policies, in amounts specified by the condominium instruments but not in amounts less than $1,000,000.00 for injury, including death, to a single person; $2,000,000 for injury or injuries, including death, arising out of a single occurrence; and $50,000.00 for property damage;”
How much coverage an association should carry is generally decided by the board of directors, with guidance from property managers and insurance professionals.
Liability Limits
Occurrence Limit – This is the maximum amount the policy will pay per occurrence. An occurrence means an accident that results in injury or damage neither expected nor intended from the standpoint of the insured.
General Aggregate Limit – This is the most the insurance company will pay for any and all liability occurrences or losses under the policy during any one policy year.
Extensions of the coverage
Additional Insureds – Provides employees and property managers acting within the scope of their duties the same liability protection afforded to the association.
Advertising Liability – Protects the association against injury arising from advertising activities including slander, defamation of character or libel.
Contractual Liability - Provides coverage if the association has entered into any contracts where it agrees to indemnify or hold harmless the other party.
Cross Liability – Provides protection if an owner or member of the association sues the association for bodily injury damages occurring on a common area as a result of negligence by either a unit owner or the association.
Garage Keepers’ Legal Liability – Provides protection for the automobiles of unit owners or guests that are in the care, custody or control of the association, such as attendants that park cars. Coverage is provided for such perils as collision, vandalism and theft.
Host Liquor Liability – Provides coverage for liability that may arise if the association sponsors events where liquor is consumed or served.
Independent Contractors Liability – Protects the association from loss due to liability arising from operations of sub-contractors. (Many carriers now exclude or limit this coverage.)
Medical Payments – Provides medical expense coverage for people injured on the common property, regardless of whether the association is liable.
Personal Injury – Extends bodily injury to include false arrest, detention or imprisonment, libel, slander, malicious prosecution, defamation of character, invasion of privacy, wrongful eviction and wrongful entry. Some forms may also include coverage for humiliation and discrimination.
Property Damage – Provides coverage for the association for property of others in the association's care, custody or control at the time of loss. Some forms limit coverage to the peril of fire only.
Severability of Interest – Precludes the insurance company from denying liability because of negligent acts of the association or a unit owner.
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