Re: How much liability insurance do other cohousingcommunities carry?
From: Christine Johnson (
Date: Sat, 15 Oct 2011 07:52:19 -0700 (PDT)

Michael Barrett wrote: satisfy my curiosity, how much liability coverage does Stone Curves Cohousing have? And what range
did the retired broker recommend ?

The answer isn't meaningful because Stone Curves has different exposures than your community and every other community not to mention AZ insurers are bound by AZ regulatory entities; the underwriting and rate setting factors for an AZ insurer differ from those of a VA insurer's.

If you have 10 million dollars in coverage the plaintiff's lawyers will come running. If you have little or no insurance and few liquid assets, they may be quite reluctant to even take the plaintiff's case, if they cannot see a fat fee (maybe 40% of sum awarded + expenses) being won and paid.

Point taken!  Another terrible outcome once the lawyers come running:
if as you suggest " have little or no insurance and few liquid assets, they may be quite reluctant to even the the plaintiff's case... " is that the plaintiff's lawyers now elect to personally name each of the Board of Directors in the action. These individuals likely do have assets. Even if you, as a Board Member are not even remotely liable, you still must defend and your costs of defense may or may not be covered under the community's policy. That's why its essential for the HOA or COA to carry Officers and Directors liability coverage. A good D & O includes coverage for the costs of non- monetary damages.

The risks of going forward underinsured are greater than the risk of going overinsured. In the above scenario ("...little or nor insurance and few liquid assets..) while the Association and its Directors may not finally be subject to defending a legal action, the community now has a tainted "claims history". The Association's insurer may not offer to renew or offers to renew at an exorbitant rate. The Association's "claims history" must be disclosed in a submission for new coverage and now the Association is damaged goods due to its having "...little or no insurance and few liquid assets...". Now you're looking at high risk pools. If you have to pay a premium to Lloyds of London (the principal high risk insurer), all that you saved over the years by failing to insure or underinsuring is lost. Of course, this isn't to discount how much fear and upset everyone impacted will be experiencing.

Yeah, it's all an awful and complex mess. As soon as we act collectively and assets involved, insurance and legal interests are in the mix. There's no ushering them out. Sadly.

Christine Johnson
Stone Curves Cohousing
Tucson, AZ

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