What Insurance Coverage Does Your Condo Association Need?


Condo association board members are responsible for ensuring their association is protected and covered in the event of an emergency or any other situation that results in damage to the property or liability. 

Analyzing insurance coverage options is far from easy, but there are a few specific types of insurance your Chicago condo association must maintain, per Section 12 of the Illinois Condominium Property Act. You should shop around to get the best rates, but don’t forgo coverage altogether. Compare proposals for the best coverage to protect your community and meet the board’s fiduciary obligations. 

Property and Liability Insurance 

HOAs and condo associations should hold general liability and property insurance. Sometimes insurance companies bundle these coverages.

General property insurance covers the buildings and property structures themselves. It doesn’t cover any individual owner’s personal contents within their units. Liability insurance covers things like injuries that take place on the property. For example, if a visitor slips and falls near your pool and gets injured, liability insurance would protect you.

Fidelity Bond / Crime Insurance

If the condo association has six or more dwelling units, it must obtain a fidelity bond to protect the funds that are in custody or control of the association. That includes the association’s reserve funds.

D&O Coverage

D&O coverage is an insurance policy that protects the condo association’s directors and officers. It adds a layer of liability protection for volunteer board members in the event of any claims being made against the HOA.

Workers’ Compensation Coverage

Condo associations should also hold worker’s comp insurance. This type of coverage can cover volunteer board members as well as any vendors or employees of the association. Talk to your insurance provider to discuss the specifics of your worker’s comp policy. 

Additional Coverage

The best way to protect your condo association is with adequate insurance, but your insurance needs can vary. Some associations benefit from garagekeeper’s coverage if they allow non-members to park on their premises; others require social host liability insurance if they permit alcohol to be served in their public spaces.

Work with your association management company and insurance broker to discuss the essential coverage types and policies you need to protect your condo association. For additional questions about condo management in Chicago, please contact our team at First Community Management.