Cover your Property – and yourself!
As an apartment building owner or member of a homeowners association, there are plenty of risks to worry about, including damage to your building, tenant liability claims and injured guests.
 Property claims                                                 
Property coverage protects you when your apartment building is damaged. Your policy may include coverage for damages caused by fires, wind and other perils, and may also include loss of rental income and coverage for building ordinance upgrades.  Building ordinance coverage pays the additional cost to upgrade your building to current building codes as required by your city.  Examples of code upgrades are; installing sprinkler systems, changing roof lines for current height restrictions, sidewalks, wheelchair access, 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 when you purchase it. You are insuring a large asset.  Make sure to get adequate coverage.  Ask questions and understand your policy coverages and exclusions.  Don’t wait until you have a claim to find out you are not adequately covered.
General liability claims
Homeowners associations and apartment building owners each face a unique set of risks.

Homeowners associations and directors
  • Your obligations to association members and guests are outlined in your CC&Rs.
  • Your CC&R contact likely requires you 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 HOAs stem from failure to maintain common areas. This could lead to property damage, bodily injury and prevailing-party attorney feed.
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 guests foe slip-or trip and fall injuries
  • Tenant discrimination.
The most common claim against apartment building owners are for damages stemming from habitability issues. This could lead to bodily injury, rent abatement, statutory damages and attorney’s fees. Fix broken steps, replace treads on steps when they are worn, make sure there is plenty of light in the parking areas, clean up the leaves in the fall they become slippery, power wash any moss build up. 
Conditions of Liability
For both HOA’s and apartment owners, liability for these claims is not automatic and, in fact, depends on certain conditions.
  • Did a maintenance issue exist on the property?
  • If so, were you or your management team aware of the issue or should you have been aware of it?Did you fail to remedy it?
  • Did the condition or defect cause the injury or property damage?
  • Did any other party (i.e., landscaper, contractor, and tenant) create the condition?
  • Was the condition caused by an original construction default?
Liability depends on many factors, which vary from state to state.  The burden of proof for establishing fault lies with the party making the claim.
When Disaster Strikes – You Need to Spring into Action!

When a loss occurs at your building, initial evidence gathering is crucial.  First, contact your carrier or agent.  Then try to obtain the following:
  • 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 there is nothing there.
  • Preserve any evidence that might be related to the loss.
  • Part of your responsibility in a loss situation is to take steps quickly to mitigate further damage by making sure the area is safe and secure, get water dried up before mold sets in, board up broken windows, etc.
Expect your carrier to do the following:
  • Take a recorded statement and work with all parties to get the facts.
  • They may 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.
  • Large loss claims are overwhelming not matter what your experience is with apartment ownership.Do not hesitate to call you agent to help you understand the claims process if you are not getting what you need from your claims person.
Preventing Accidents
To limit your risk you should:
  • Conduct periodic property inspections to detect and correct dangerous maintenance conditions.This should be done quarterly at a minimum. Put it in your calendar.Take notes of your findings and ordered maintenance.Keep those notes!
  • 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!




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 &