As the COVID-19 pandemic continues to wreak havoc around the world, our land of HOA Struggles is no different. As boards are busy trying to decide whether pools and playgrounds will be open this season, they oftentimes forget to look at the issue of liability insurance and whether they would be protected should an owner file a lawsuit against the association or individual board members on the basis that he/she contracted the virus on association grounds.

Prior to making decisions about pool and playground openings, we highly encourage associations to reach out to their insurance professionals and obtain determinations on coverage for COVID-19 related claims.   Unfortunately, in many cases the answer is “no coverage”.   

Most liability policies contain exclusions for viral infections, bacterial infections, and/or communal diseases, which translates to no coverage for claims that fall under this category. In other words, this means an association that gets sued by someone claiming to have contracted the virus on association property must pay out of pocket for its legal defense.  Depending on how far such legal action goes, legal fees could easily exceed $50,000 or $75,000.

It is the author’s understanding there are a handful of liability policies that afford some coverage for these types of claims, which is why it is imperative to consult with the association’s insurance representative to determine if your community has coverage. Understandably, many associations are basing their decisions to open/close amenities on this fact alone. 

On a side note, we are often asked whether keeping amenities closed could also get associations sued. The answer is yes, BUT these types of insurance claims, in most cases, will be covered by associations’ liability policies and will not result in huge expenditures of association funds unlike most COVID-19 claims.

Please contact an Altitude attorney, at 303.432.9999 or [email protected] with any questions about insurance coverage and COVID-19 associated claims.

2 responses to “Liability Insurance and COVID-19 – Are They Mutually Exclusive?
  1. Elina – This is an excellent article and every board should put this on it’s reading list for today. If anyone is considering to open or keep open their non-essential common elements such as pools, gyms or sport courts, they should schedule an on-line meeting with their insurance professional, and I would also recommend discussing with your attorney(s). This may not be a popular decision, but remember, like with being a parent, we sometimes need to share things that people do not want to hear.

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