If you’re managing a Homeowners Association (HOA), you’re well aware of how vital it is to maintain protection for your community. One meaningful way to accomplish this is with HOA insurance, a specialized coverage meant for homeowner associations.
With so many options and requirements, what insurance does your HOA need?
In this blog, we’ll explain in simple terms and provide insight into what type of homeowners association insurance your company should look for.
Why HOA Insurance Matters
HOAs are entrusted with considerable responsibility. Whether it’s keeping common areas maintained or safeguarding community assets, unexpected risks can result in significant financial loss. That’s where homeowners association insurance comes into play — providing coverage that protects the association’s property, liability, and even board members.
However, without the right policy, one incident could leave your HOA vulnerable to lawsuits or expensive repairs.
The good news?
The right insurance plan gives you peace of mind and long-term stability.
Key Types of HOA Insurance Your Company Needs
1. General Liability Insurance
This serves as the basis of all HOA policies. It includes bodily injury and property damage claims that happen in common areas such as parks, pools, sidewalks, and clubhouses. This insurance helps pay legal and medical expenses if a guest falls and injures himself or herself or damages property on HOA grounds.
2. Property Insurance
It’s also called “Master Policy” insurance, and it covers the physical structures and shared spaces the HOA owns — think roofs, walls, elevators, and lobbies. Depending on your coverage, that might encompass full reconstruction or just the bare walls of individual units.
There are typically two types:
- Bare Walls Coverage
- All-In Coverage (includes interior elements like cabinets and fixtures)
Understanding which one suits your HOA is crucial.
3. Directors and Officers (D&O) Insurance
Board members make difficult decisions — and not everyone will like them. D&O insurance protects board members against lawsuits alleging mismanagement, discrimination, or decisions made in bad faith. It includes legal defense and settlements, ensuring coverage for the person who serves your community.
4. Workers’ Compensation Insurance
If your HOA hires employees—even part-time maintenance staff—workers’ comp is essential. It covers medical expenses and lost wages if an employee gets injured on the job. It’s also often required by state law.
5. Fidelity/Crime Insurance
Unfortunately, HOAs are sometimes targets of fraud or theft. Fidelity bonds or crime insurance protect against financial losses caused by dishonest acts of board members, employees, or volunteers, such as embezzlement or forgery.
6. Umbrella/Excess Liability Insurance
This adds an extra layer of protection over your general liability, auto liability, and D&O coverage. If a claim exceeds the limits of your existing policies, umbrella insurance picks up the rest.
Optional but Valuable Coverages
Depending on the size and needs of your HOA, you may also consider:
- Equipment Breakdown Insurance: for boilers, elevators, or HVAC systems.
- Cyber Liability Insurance: if your HOA stores sensitive resident data electronically.
- Commercial Auto Insurance: if the HOA owns and operates any vehicles.
How to Select the Right HOA Insurance Policy
Each homeowners association is different. The type of coverage you need depends on the size of your community, the amenities you offer, and state requirements. That’s why working with an experienced insurance partner is so important.
At e360 Insurance Services, we take pride in providing comprehensive policies that meet the unique needs of your homeowners association (HOA). We guide you to understand your risks, find the best carriers, and keep you compliant with changing legal requirements.
Final Thoughts
It’s a smart move to have the right homeowners association insurance. It covers you, your board, and your community. If you’re founding a new HOA or updating your existing policy, now is the moment to ensure you’re fully protected.
Are You Ready to Review Your HOA Insurance Needs?
Connect with experts at e360 Insurance Services today for a free consultation or to request a quote. We’ll help you safeguard your greatest asset, your community.