Servicing Guide

Published June 13, 2018

B-7-01: Liability Insurance Requirements for Project Developments (11/12/2014)

The HOA or co-op corporation for a PUD, condo, or co-op project must maintain a comprehensive general liability insurance policy covering the entire project, including:

  • commercial spaces owned by the HOA or co-op corporation, even if the spaces are leased to others; and

  • bodily injury and property damage resulting from the operation, maintenance, or use of the project’s common areas and elements.

Additionally, for PUD or condo projects, the policy must also cover all common areas and elements, public ways, and any other areas under the HOA’s supervision.

The minimum general liability coverage required is $1 million for bodily injury and property damage for any single occurrence.

If the policy does not include “severability of interest/separation of insureds” in its terms, the policy must contain 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.

The policy must provide at least 10 days written notice to the HOA or co-op corporation before the insurer can cancel or substantially modify the policy. For condo and co-op projects, similar notice also must be given to each holder of a first lien mortgage loan on an individual unit in the project.