May 20, 2014 Jon Crain, Armstong/Robitaille/Riegle
One coverage that is often misunderstood or rarely talked about when it comes to Homeowner Associations is coverage for “Non-Owned Autos.” Despite this coverage being relatively unknown it is very important . You should make sure the Association’s current policy has this in force. It is very inexpensive to add in the event there is no current coverage. Most Associations do not have “owned autos” so one might ask why coverage for a “non-owned auto?”
Let’s use the example in which the Association asks one of its Board members to drive to the Management Company’s office to review and discuss the budget. On the way to the Manager’s office, there is a horrible auto accident and the Board member is determined to be the party at fault. The injured party litigates the driver of the vehicle (the Board member) as well as the Association. The allegation against the Association is that the Board member was travelling on behalf of the Board and therefore the Association should also be a defendant.
In order to have coverage for defense, let alone indemnity if the Association is found to be liable, coverage for “non-owned auto” must be included in the Association's insurance portfolio.
Non-owned auto is defined as “those autos you do not own, lease, hire, rent or borrow that are used in connection with your business. This includes autos owned by your employees, partners, members, or members of their households but only while used in your business or your personal affairs.”
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