For the last several years, our first Coverage Corner of the year has been about New Year’s Resolutions. We have listed several items we feel are important for communities to be aware of, changing and adding to the list each year.

This year, we are doing things differently. Our New Year’s Resolution is to provide in-depth education about insurance policies for common interest developments. So, for 2022, we are going to be explaining things that are often misunderstood or confusing.

To start things off, here is a summary of the types of insurance required by law for California common interest developments:

• General liability insurance
o $2 million per occurrence for communities of 100 or fewer units
o $3 million per occurrence for communities of 101 or more units

• Fidelity / Crime / Employee Dishonesty Insurance
o Limit must be no less than 3 months’ worth of assessments plus the total in reserves
o Must include coverage for computer and funds transfer fraud
o Must include coverage for all those handling funds, including managing agent / company

• Directors & Officers Insurance (to prevent personal liability for directors owning 2 or fewer units)
o $500,000 per occurrence for communities of 100 or fewer units
o $1 million per occurrence for communities of 101 or more units

Note that governing documents for associations may have different requirements. For example, a condominium community may require property insurance for the buildings, while some associations may need insurance for a tot lot or a clubhouse.

We are always looking for input from our readers, so if there is something you wonder about, are confused by, or have always wanted to ask – now is your chance! Remember there are no stupid questions. For example, asking why elevator collision coverage is included in policies for single-story communities – totally valid question!

We look forward to educating you over 2022!

Terri Guest, CIRMS, CMCA, EBP is the Northern California Sales & Marketing Representative for Berg Insurance Agency and may be reached at Terri@BergInsurance.com