Liability insurance is required for certain condo and co-op projects.
The HOA or co-op corporation must maintain a commercial general liability insurance policy for the entire project. The policy must include coverage for:
commercial spaces that are owned by the HOA or co-op corporation, even if they are leased to others, and
bodily injury and property damage that results from the operation, maintenance, or use of the project’s common areas and elements, and any other areas that are under its supervision.
If the policy does not include severability of interest or separation of insureds in its terms, Fannie Mae requires a specific endorsement to preclude the insurer’s denial of a unit owner’s claim because of negligent acts of the HOA or co-op corporation or of other unit owners.
Liability insurance is required for all condo and co-op projects, with the following exceptions:
The amount of coverage must be at least $1 million for bodily injury and property damage for any single occurrence.
The policy must provide at least ten days’ written notice to the HOA, co-op corporation, or insurance trustee before the insurer can cancel the policy.
The table below provides references to the Announcements that have been issued that are related to this topic.
|Announcement SEL-2018-07||September 04, 2018|
|Announcement SEL-2018-06||August 07, 2018|
|Announcement SEL-2017-04||April 25, 2017|
|Announcement SEL-2016–07||August 30, 2016|
|Announcement SEL-2016–03||March 29, 2016|
|Announcement SEL-2014–13||November 10, 2014|
|Announcement SEL-2014–10||July 29, 2014|