We often focus on insuring our personal assets, but it is just as important to pay attention to the liability cover included in the community insurance for the building where we live.
Unexpected events can occur within a homeowners’ association, from simple incidents to much more complex disputes. The community may receive claims for damage, which can lead to lawsuits or compensation claims.
All of this could become a serious problem if the community does not have a community insurance policy with solid liability cover.
The Obligation to Compensate for Damage Caused
The law establishes an obligation to compensate for damage, whether bodily injury or property damage, caused by the building or by the responsibility of the homeowners’ association, whether due to fault or negligence. Without insurance, the owners themselves would have to pay, either through community funds or, ultimately, from their own assets.
It is always far more advantageous for an insurance company to cover the repairs and compensation that may arise, without putting your own finances at risk. In fact, in some Spanish autonomous communities it is compulsory for homeowners’ associations to take out fire and liability insurance. In others it may not be compulsory, but it is still highly necessary and strongly recommended.
What Exactly Is Liability Cover in Community Insurance?
In simple terms, it is the cover that protects against damage caused to third parties and to any co-owner, due to fault or negligence, by an act or omission of the community or as a result of incorrect maintenance, adaptation or repair of the building.
Guarantees That May Be Included in Community Insurance Liability Cover
- Property-owner liability, covering damage caused by the elements forming part of the building and its installations.
- Liability for water damage, caused by breakages, faults, overflows, blockages or similar causes in communal installations.
- General owners’ liability, including claims, compensation payments and related legal proceedings.
- Employer’s liability, covering damage arising from workplace accidents suffered by community employees. It can also respond for the actions or omissions of those employees while carrying out their duties.
- Subsidiary liability for building works.
Other Guarantees That Some Insurers May Add
- Liability for vehicles in garages, covering damage caused to parked vehicles, commonly due to fire and explosions, although in some cases it can be extended to other situations.
- Liability of the governing board of the community for damage or losses caused by poor decisions, breaches or failures to comply with its obligations.
- Liability for environmental damage.
- Liability for autonomous vehicles and machinery, such as golf carts and similar equipment.
Now that you know what liability cover in community insurance involves, you can see how important it is in policies for residential buildings.
What to Consider When Assessing Liability Cover in Community Insurance
There are many details that should be reviewed, but the following are especially important:
- sums insured
- sublimits
- possible deductibles
- guarantees included within the liability cover
- exclusions
- the insurer’s efficiency when handling claims; this is something you can ask your trusted insurance brokerage.
If you would like more information, contact us.
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