Condo Media - February 2021 - 17

resolution. This form should be
l Explain the claim process, including
Moreover, while insurance resolutions
executed upon payment of proceeds
reporting requirements. When damare frequently used, no appellate court
under the master insurance policy
age exceeds the master insurance polin the Commonwealth has ever conand should provide that the board
icy deductible, the procedure set forth
sidered the validity of same. However,
and its affiliated entities and/or
in the insurance resolution should be
notwithstanding the foregoing, a court
agents are released from any and
adhered to. The insurance resolution
or other reviewing body may look to an
all claims arising out of the casualty
should provide, among other things,
insurance resolution as evidence of the
loss. Such release form also typically
that: notice should be provided to
board's operating procedure and inincludes an indemnification provithe board and/or its managing agent
terpretation of its own governing docusion, providing that the benefitted
either as soon as practicable or within
ments. In this way, while the insurance
unit owners will indemnify the board
a certain time period (e.g., 72 hours);
resolution has certain limitations, it
in connection with any claims by any
unit owners should provide prompt
would still be advisable to adopt a resothird parties arising out of the casunotice to their own insurance agent or
lution as a means of memorializing the
alty loss, and a restoration agreement
carrier as soon as practicable; in the
practices of the association relative to
provision, whereby the unit owner
event the damage poses an immediate
insurance claims.
threat to safety, necessary repairs should be
An insurance resolution should identify the provisions of the
undertaken in order to
remedy the threatencondominium's governing documents that set forth the controlling
ing situation; and in
any non-emergent
language concerning the condominium's master insurance policy.
circumstance, unit
owners should secure
is required to have their contractor
bids to repair the damage within a
FINAL THOUGHTS
approved by the board (approval not
certain time period (e.g., 30 days).
Despite the fact an insurance resoluunreasonably withheld), ensures the
It is also recommended that an insurtion is limited to the extent it does
contractor has adequate insurance,
ance resolution provide that the board
not operate as an amendment to the
and the like. It is worth noting that
has no obligation or responsibility to
condominium's governing documents,
the validity of requiring execution
perform repairs to any individual units
it can be a useful and important tool in
of a release in this circumstance
and that, in the event it does perform
setting forth the procedure to be adremains an open issue, but it is advissuch repairs, the affected unit owners
hered to in the event of a casualty loss
able to incorporate this into your
shall execute a release.
at a condominium. As it also operates
procedure to protect the interests
Most importantly, the procedure
to establish the board's written policy
of the association when feasible.
contemplated by an insurance resoluas to how insurance claims should be
tion should be a cooperative one. In
handled, it may also inform interpretaARE THERE ANY POTENTIAL
the event of a loss, it is inevitable that
tion of the insurance provisions conDRAWBACKS OF ADOPTING
stress will be placed on all parties
tained in a condominium's governing
AN INSURANCE RESOLUTION?
involved, including the unit owners,
documents. As with any resolution or
The primary limitation of an insurance
board, and managing agent. An insurpolicy being contemplated by a board,
resolution is that it does not constitute
ance resolution that not only sets forth
there may be specific provisions in the
an amendment of the condominium's
a detailed and clear procedure of the
condominium's governing documents
master deed or declaration of trust and
steps that are to be undertaken by all
that require a distinct approach or
does not operate to modify or amend
involved parties, but also encourages
unique provisions, other than those
the provisions concerning insurance
a collaborative process to make the
contemplated herein. In any event, an
contained in such documents. Those
unit accessible for inspection, secure
insurance resolution can be a useful inprovisions, which require unit owner
additional bids, respond promptly, and
strument for most condominiums, the
approval to modify, will continue to be
identify the scope of work, may make
benefits and adoption of which should
controlling. Thus, to the extent there
the insurance claim process smoother
be considered by all associations.
is a provision in your condominium's
for all involved.
governing documents that requires
n KIMBERLY A. BIELAN, ESQ.
modification because it is ambiguous
l Attach a sample release form for
IS A PRINCIPAL OF THE FIRM
or otherwise includes an unworkable
disbursement of insurance proceeds.
MORIARTY TROYER & MALLOY LLC.
provision, an insurance resolution canIt is advisable that a sample release
not, in and of itself, effect such change.
form be appended to an insurance
February 2021 CONDOMEDIA

Condo Media - February 2021

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