Cover your Property – and yourself!
As an apartment building owner or member of a homeowners association, there are plenty of risks to worry about, damage to your building, tenant liability claims and directors and officer’s liability to name a few.
 Property claims                                                 

Building coverage protects you when your property is damaged, most commonly from fire, wind or water.   Your policy may include coverage for these damages and may also include loss of rental income and coverage for building ordinance upgrades. 

Building ordinance claims generally come into play when a building has incurred a 50% or greater loss.  At that point the city will require you update your entire building to the latest building codes.  If you hold a replacement cost insurance policy your carrier will pay to rebuild your building as it was, not to improve it to current codes.  Building ordinance coverage pays that additional cost to upgrade your building. 


Examples of ordinance code upgrades requirements; Adding micro housing units, installing sprinkler systems, replacing deck railings to 4” spacing, changing roof lines for current height restrictions, adding sidewalks, burying power lines, installing wheelchair access units, using energy efficient electrical systems/heating/appliances and the list goes on.  The older the building the more of this coverage you should obtain.

Because property claims can be very complex, it is important that you familiarize yourself with the coverage on your policy before you bind it. You are insuring a large asset, this is not the time to cut corners to save a few dollars.  Obtaining adequate coverage should be your priority.   Find an experienced commercial lines agent, ask questions, understand your policy’s coverages and exclusions.  Do not wait until you have a large loss claim to find out you are not adequately covered.

Liability Claims
Homeowners Associations Directors and Officers Coverage Your obligations to association members and guests are outlined in your CC&Rs. CC&R’s commonly require board members to;
  • Observe a reasonable duty of care to maintain safe premises.
  • Warn members of any known hazards.
  • Maintain all common areas, including landscaping, building exteriors, roofs and common-line plumbing pipes.
  • Provide certain coverages such as unit owner’s coverage, fidelity bonds, errors and omissions coverage (E&O) for the board members and/or earthquake.

  One of the most common types of claim against COAs stem from failure to maintain common areas. This could lead to property damage, bodily injury and prevailing-party attorney feed.  From time to time I run across COA policy’s that do not include Unit owners coverage.  Unit owners expect this to be on their master policy.  Not including this coverage leaves the board of directors open for E&O liability claims

Apartment building owners
Most states require apartment building owners to;
  • Observe a reasonable duty of care to maintain safe and habitable premises.
  • Warn of any known hazards.
  • Keep premises free of all known defects.
  • Repair defects once they become known.

Most claims against apartment owners fall into one or two categories.

  • Claim by tenants for breach of warranty of habitability.
  • Claims by tenants or guest slip-or trip and fall injuries.
  • Tenant discrimination.

Ways to Prevent Liability Claims

  • Keep up to date on the latest landlord tenant discrimination laws.  The RHA provides many classes and resources.  You can also buy insurance coverage for this.  It typically runs about $50 monthly for your first 100 units.
  • Conduct periodic property inspections to detect and correct dangerous maintenance conditions.  This should be done monthly at a minimum. Put it in your calendar.  Take notes of your findings and ordered maintenance.  Keep notes.
  • Conduct annual inspections of the units.
  • Make your building “smoke free”.  In Washington it is now legal to smoke marijuana.  You may need to update your lease agreements to prohibit this in your building.  Read your policy exclusions there may be some limits to coverage due to smoking.
  • Talk to your tenants/unit owners.  Ask them how things are going.  Do they know of any maintenance issues?  Have they seen any questionable activity on the premises?  Consider a neighborhood watch program or onsite manager.
  • Provide adequate lighting both interior and exterior.
  • Clean up those leaves!
When Disaster Strikes!
When a loss occurs at your building, initial evidence gathering is crucial.    Part of your responsibility in a loss situation is to take steps quickly to mitigate further damage by making sure medical assistance is obtained by any injured parties, the area is safe and secure, water is dried up before mold sets in (by a professional restoration company), board up any broken windows, etc.

Obtain the following information;

  • Names of any independent witnesses.
  • A statement prepared and signed by the injured person, describing what happened, what injuries were sustained and their contact information.
  • Photographs of the precise location of the fall, injury or property damage, even if it appears there is nothing there.  
  • Preserve any evidence that might be related to the loss.
  • Contact your carrier and/or agent.
Expect your carrier to;
  • Take a recorded statement and work with all parties to get the facts.
  • Ask you to provide certain documents, such as lease agreement, management agreements or conditions, covenants and restrictions (CC & R’s), maintenance receipts and photos. Make sure that you continue to keep these receipts as they become very important in claim processing.
  • For larger claims they will perform an onsite inspection of the premises as well as speak to tenants and or any witnesses that they can find.




This article was prepared by Stacey A Scott Insurance Agency Inc/Madison Avenue Insurance Group 14522 NE North Woodinville Way, Ste. 205 Woodinville WA 98072 (425) 481-1430 &