In Essex Insurance Co. v. DiMucci Development Corp. of Ponce Inlet Inc., U.S. District Judge Roy B. Dalton Jr. recently held that Evanston Insurance Company has no duty to defend a builder in a lawsuit alleging construction defects at one of its Florida condominium complexes based on an exclusion in the policy for damage to the developer’s own work.1


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A federal district court in Washington recently decided that a claim against the owner of a condominium unit arising from the owner’s installation of a hardwood floor without the necessary permission (as spelled out in the Condo association’s bylaws), did not amount to an “occurrence” under the owner’s insurance policy.1


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Several weeks ago I blogged about the way insurers sometimes use “other insurance” provisions to argue that they are not responsible for paying for a loss because “other insurance” is required to do so. In today’s blog I will address a similar and related topic that comes up in scenarios involving condominium and homeowners’ associations.

Condominium Owner Insurance (COI) policies are designed to insure everything inside the condo, while recognizing the Home Owners’ Association (HOAs) will insure the common areas. The HOA coverage is often referred to as "walls out" coverage, because everything within the walls of the owner’s individual unit is usually that person’s individual responsibility (But in some condo policies, the interior, "bare" walls are covered by the HOA master policy as well). Generally, the HOA’s governing documents (CC&Rs) should typically state exactly which areas the HOA policy insures.


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Many of you are familiar with the following scenario—an insurance claim is denied because there is no coverage. Subsequently, the insured pursues a claim against their insurance broker for failing to obtain the coverage requested and pursues damages against the insurance broker for the insurance coverage that would have been available but for the negligent conduct of the insurance broker.

However, what many of you may not be familiar with is a similar claim that can be made against the Home Owner Association (HOA) where the HOA is required to obtain specified types of insurance coverage for the benefits of its members (according to the terms and conditions of the of CC&Rs) but fails to do so.


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