Condo Media - September 2014 - 28

INSURANCE
* Ask how many management companies they work with at this time.
* Ask if they have any community
association or relevant insurance
designations.
* Ask if they participate in any industry
organizations such as the Community Associations Institute.
* Ask what role they will play in the
event of a loss.
* The professional must present to the
board in person.
* Ask what the community association
insurance specialist will do once the
program is put together (i.e., explain
the requirements of each policy in the
event of a loss and provide education).
The big issue we come across with
board risk managers is that they try to

delegate their insurance responsibility.
Their authority is to make the decision.
If they believe the decision is beyond
their level of understanding, they can
seek assistance from a community association insurance professional. Once the
board sits with the community association professional, the mystery and complexity of insurance is often overcome.
If not, they probably need a different
professional. Again, many managers can
put insurance professionals to shame
with their knowledge and experience,
but do they have the errors and omissions coverage to back up their advice?
When the board risk manager is obtaining proposals from multiple insurance
professionals, if the board chooses to go
with that strategy, they should request
the proposals without the pricing. Accordingly, the board can go through the
multiple proposals and determine which
is appropriate to protect the association
assets. After they have determined which
best protects the community association's

assets, they can then consider the pricing
and make the cost-benefit analysis as to
whether it is in the best interest of the
association to be self-insured for certain
perils and roll the dice that no claims will
happen and they will dodge a bullet.

Conclusion

The board is the community association
risk manager. The board's duty is to place
the interest of the association above its
own in order to protect the assets of the
association. The board makes the decisions and delegates to its risk management
team to effectuate the risk management
plan. The community association is a
business, and the job as a board member
should not be accepted lightly or with the
idea that you are just rubber stamping the
work done by someone else. CM
Joel W. Meskin, Esq., CIRMS, is vice
president, Community Association
Insurance and Risk Management,
McGowan Program Administrators.

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28

Condo Media * September 2014

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Condo Media - September 2014

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