What Are Insurance Programs?

Mari Ann Cole, President
Long Island Coverage Corp. Insurance

The Lay of the Land

Insurance is one of the largest line items in an annual financial statement. For that reason, insurance should be reviewed by the board every year. You want to make sure that at a minimum you have what is required by your offering plan, proprietary lease, bylaws, and declarations. An annual review also allows your broker to alert you to new insurance products. The newest and greatest is cyber liability. Should you maintain it? Do you really need it? These are the type of questions that you should ask a broker about.

Insurance runs the gamut of A to Z, and premiums can range anywhere from $1,000 to $1 million, depending upon a lot of items that go into underwriting – the number of units and floors, the construction of the building, sprinkler systems, standpipes, even the type of stairwells.

You always want to make sure that you have adequate coverage in the event of a complete catastrophe, and your bids for renewals should go out every three to five years. Many people think this should be done every year, but if insurance carriers are asked to produce an annual quote and they don’t wind up writing the policy, it becomes a waste of energy, time, and money. Each time they produce a quote they have to inspect your building and look at your loss history. If you do this every 12 months, after a while, they may be unwilling to give a quote.

Now What?

Premiums will be affected by your amenities. Do you have a pool, a gym, commercial space on the first floor, office space in the building? These are all rated differently from residential units, and all the information is factored into the cost of the premium.

As for crime insurance, there are a vast number of programs available, but you always have to be aware of who is the named insured and who is covered. Is it the board, volunteers, committees, everybody acting at your direction? You should make sure that the crime policy covers everybody who needs to be covered. You don’t want to be without the correct coverage if you have a loss.

Insurance can be very confusing to an ordinary person who’s not in the industry. That’s why it’s very important to take care in choosing a professional who knows the co-op and condo field.