How to Spot Gaps in Your General Liability Policy | CPM

Key Takeaways:

• An exclusion in an insurance contract is a clause that removes coverage for a specific type of event, which can potentially leave the association uncovered.
• Common exclusions to look out for include but are not limited to assault and battery, animal or animal bite, firearms, abuse or molestation, special events, and water damage.
• Some of the events that these exclusions may be related to can be extremely unpredictable and hard to control, which makes it even more important to seek proper coverage for them.
• Sometimes these exclusions can be removed from the policy by negotiating with the incumbent carrier. Alternatively, your agent can approach other carriers to find options without them.

What Are Insurance Policy Exclusions?

An insurance contract may contain various clauses that exclude coverage for specific types of events.

Why are these important to be aware of?

It is vital to be aware of what is specifically excluded in your policy to understand where you may have gaps in coverage, as this can leave you exposed to large out-of-pocket costs in the event of a loss.

Additionally, some of these exclusions are related to events that can be very hard for the board or property manager to control. Events that are unpredictable and expensive to defend against in a suit are exactly what you want to ensure you have coverage for.

What are common insurance exclusions that community associations should look out for?

These exclusions all differ from carrier to carrier, and each carrier includes its own set of exclusions for various reasons. Exclusions can appear both in the standard policy form and in the endorsements attached to it, so both are worth reviewing. Below are some of the common ones to check for.

• Assault and Battery
• Animal or Animal Bite
• Firearms
• Abuse or Molestation
• Special Events
• Water Damage
• Construction Activities
• Liquor Liability
• Independent Contractor or Subcontractor Liability
  
  

How do we fix them if we do have these exclusions?

Sometimes these clauses can be removed from the policy at renewal with the current carrier. However, if that is not possible, then your agent should approach other carriers that may not include them in their policy.

Because carriers all include their own exclusions and limitations, your agent’s role is to dissect each possible option, negotiate the terms to the best of their ability, and identify the policy with the least amount of risk to the association.

Would you like help checking for these?

Our team at Community Insurance Experts can help review your policy to identify any exclusions worth flagging, explain what they mean and the potential implications, and discuss whether they can be addressed. Reach out to Chad Tiernan at chadtiernan@communityie.com.

Learn more about Florida Community Insurance

Campbell Property Management regularly hosts educational webinars related to insurance and other topics that affect Florida condominium and HOA communities. Visit CampbellEvents.org for upcoming educational opportunities and events.

The team at Community Insurance Experts specializes in working with Florida community associations on their insurance, and they are happy to help provide advice and guidance on these items or any others your association may be facing.

Community Insurance Experts is a Florida commercial insurance agency dedicated to serving community associations across the state. They provide a comprehensive range of coverage options tailored to meet your community's needs, including property, general liability, directors and officers, crime, umbrella, workers compensation, and more.