If you are an officer in a homeowners’ association or HOA, you need to think about your obligation to the community. You are responsible for the upkeep of a safe community. Sometimes liability insurance isn’t enough and you may need an umbrella policy.

Here is what you need to know about the importance of umbrella insurance for HOAs.

What Is an Umbrella Policy?

An umbrella policy is an excess liability policy. The point of excess liability is to cover unforeseen events and to protect the HOA’s assets. Unexpected events and tragedies may not be covered under general liability coverage. Umbrella coverage may include excess general liability, excess auto liability and excess directors and officers liability.

Why Do HOAs Need to Carry Umbrella Policies?

A neighborhood or condo association could suffer serious losses if someone were to suffer an injury in the community. For example, if the bushes or landscaping are overgrown and hide a stop sign, leading to a car accident, it might be the fault of the HOA. A lawsuit of this caliber could hurt the association and cause a loss of assets.

Standard insurance options are not always enough. It is safer to have an umbrella policy in place to ensure that your HOA’s assets are protected in the case of an emergency.