Do we need to ask for insurance?

Started by TonyN2 • 12 replies • 312 views

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TonyN2 (Illinois)
Posts: 62

Posted:

We have a small but big problem. Our elevator gets stuck on the top floor because of the button being broken on the top floor. Our elevator company will fix the issue, but somebody a long time ago decided it would be a good idea to encase the whole button fixture for the elevator in molding. This means we have to hire somebody to remove the molding, then put it back and repaint as the elevator company says they don’t want to do that and if they do it will be really ugly and messy.

For such a small, easy job, do we need to request insurance for the molding to be removed, put back and repainted?
Do we need insurance for any kind of work? Is there a scenario where we don’t need insurance?

Thank your. I’ll be honest I don’t know a ton about insurance outside of what our declarations say, so your advice is very helpful.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

The vendor you hire should be licensed and insured. Why would you not want this? The expense? Seriously, there are times you may want to "save money" and others you just need it done right. This is a done right situation. You don't know what could happen. Especially if the elevator company is saying they don't want to touch it.

Your HOA is incorporated and should ALWAYS hire licensed/insured contractors to do work. Your documents may require them to have a million dollar policy as a minimum. This is typical insurance amount for most contractors to be insured for.

May be an "easy job" but even a light bulb being changed could cause a fire or someone to fall off a ladder...

Former HOA President

AugustinD
Posts: 3,698

Posted:

If your COA's Declaration says the work has to be done by a licensed, bonded yada worker, then to minimize liability if things go wrong, this is what the Board has to use.

As a director, you should not hesitate to spend the money for either (1) what the Declaration expressly calls; (2) what your insurer requires; or (3) what your HOA attorney advises.

TonyN2 (Illinois)
Posts: 62

Posted:

Thank you everybody. You are all great and totally right.

BillH10 (Texas)
Posts: 1,217

Posted:

Tony, this does not appear to be a matter for which you can submit a claim to your insurance carrier. Besides, I cannot imagine the expense would exceed the amount of your deductible.

Property Insurance is intended to cover unexpected events or those which are beyond reasonable control: a fire, tornado, hail damage, someone runs off the road and damages or destroys association property, water damage in some circumstance, flood damage in some instances, etc.

The problem you describe sounds like a maintenance issue.

CathyA3 (Ohio)
Posts: 6,299

Posted:

I agree with Bill. This seems to be routine maintenance, which is not an insurable event. Insurable events are generally defined as ones that are sudden, unpredictable, and not preventable by prudent care. For example, if a storm pulled the roof off a building and shorted out the wiring which in turn damaged your elevator, that would be insurable.

Another thing to consider is that you can be penalized for the number of claims you make. Too many will cause your premiums to rise or make your association completely uninsurable. Even for insurable events, if the total cost was reasonably close to our deductible, we'd pay for the entire repair out of operating funds.

Your insurance agent can be a good source of info. We invited ours to make a presentation at a board meeting and answer questions from attendees. It was very helpful.

AugustinD
Posts: 3,698

Posted:

Perhaps the OP would like to clarify whether he is asking whether to submit a claim to the COA's insurer.

I for one thought he was asking whether the company/contractor/individual who does the repair (on the molding) must have insurance.

HenryS7 (Pennsylvania)
Posts: 336

Posted:

I don't think the question was whether they should file an insurance claim.

I believe the question was whether they should hire a licensed, bonded, and insured contractor. In our case, our property manager requires this of all of the vendors that we hire and requests copies of all of these documents from the vendors before releasing the contracts.

BillH10 (Texas)
Posts: 1,217

Posted:

To the points raised by Augustin and Henry, yes, I agree, the OP's question may be a bit fuzzy with respect to the insurance question.

TonyN2, if you are asking if the contractor you hire should be licensed, bonded, and insured, the answer is yes except in some to many jurisdictions, licensing may not be required, depending on the trade being practiced.

CathyA3 (Ohio)
Posts: 6,299

Posted:

You're right, I misread that. In which case, yes, contractors should be licensed as well as insured. Otherwise if they're injured on the job, the HOA will be on the hook, and your insurance may or may not cover the injury.

In addition, asking for proof of insurance is one way to separate the reputable contractors from the fly-by-night crowd.

TonyN2 (Illinois)
Posts: 62

Posted:

Sorry - to clarify: I am asking about whether or not the handyman should provide insurance for the work he will be doing in our building.

I am not asking about making an insurance claim.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Quote:

Posted By TonyN2 on 01/09/2022 11:46 AM
Sorry - to clarify: I am asking about whether or not the handyman should provide insurance for the work he will be doing in our building.

You should not hire anyone that doesn't have proper licensing and insurance.
Handy person or otherwise.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Hire insured vendors.

In the name of "Safety," don't replace the ugly molding and make it look nice and accessible to repair. It hampers operations.

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