Page 10 - CooperatorNews New York 2022

10 COOPERATORNEWS —
AUGUST 2022
COOPERATORNEWS.COM
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covers the whole structure including units, up of the building,” says Fleming, “no one re-
to base model fi nishes, which only excludes sponds unless the injured party sues. If they
the contents of the unit and any betterments do, then the question is, who are they suing?
or additions done by the owner. Th e third ap-
proach is ‘all-in,’ oft en used in a co-op style owner, in which case the unit owner’s policy
coverage. “But,” Fleming continues, “no mat-
ter what the association covers, that coverage named in the suit, the association’s general li-
excludes the owners’ possessions.”
Even with that said, there are still times there is an excess liability policy underneath
when determining who covers what can be it.”
complicated. “Take a leaking pipe,” says Sea-
man. “If a pipe bursts in a wall in a building
in New York City, it is not typically consid-
ered negligence on part of the association or
corporation. Th erefore, the unit owner is re-
sponsible for any damage to his or her own
personal property. But, if the pipe is then re-
paired and bursts again shortly thereaft er, that
would likely be considered negligence—and
the association or
corporation might
then be responsible
for damages. Th e
fi rst occurrence is
considered an act
of God; the second
time it’s negligence.”
Guest Policy
One area of
concern in the in-
surance
claims
sweepstakes is what
happens when a
guest visiting or passing through the prop-
erty is injured, or does some kind of damage of events.
to the property. In general, the responsibility
for a resulting claim lies where the injury or acknowledgment, the insured would contact
damage occurred. If it happens in a unit, it’s their broker with all appropriate details—in-
the unit owner’s policy that is the source of jury, damage, date, etc. Th e broker would then
coverage. If it happens in common areas, the submit a claim to all the carriers responsible
association or corporation coverage is likely for responding. Once the carriers receive the
to kick in.
“Th e unit owner is responsible for anyone assign a third-party adjuster. At that point,
or anything that happens within the unit,” the adjuster contacts the insured or claimant
says Seaman. “Th ings like common area falls directly. Th en the third-party adjuster will
and accidents are the responsibility of the as-
sociation.”
Fleming delves a bit deeper. “First things claimant keeps the broker involved. Carri-
fi rst,” he says. It must be determined “what ers want to close claims and bring the whole
was damaged, and whether it’s included in thing to an end as quickly as possible.”
the specifi c defi nitions. If a guest causes dam-
age to a unit, the question is what portion(s) claim may overlap between the building in-
of the unit? Th e next question is, how is the surance and the unit owner’s coverage, both
association insured, as outlined above. Is it companies may get involved. “Th ey may use
bare walls, base model, or all-in? Th at tells us company appraisers or independent apprais-
which policy will respond. Property coverage ers,” says Seaman, “to determine the cost of
does not change due to fault. Th e policy does repair or replacement. As a side note, the cost
not care—it covers property from certain of repairs has escalated enormously in the
causes of loss. Th e policy doesn’t have a brain. past 24 months. Contracting, material, labor,
It covers whatever it covers. If it’s a covered everything is higher.”
cost loss, the policy pays.”
Covered cost is very specifi c to its descrip-
tion within the policy. Fleming explains this typically, that’s not how it works. Each will ad-
using a novel breakfast cereal-based descrip-
tion: If an insurance policy covers ‘sudden will be provided to the insured. Th e estimates
and accidental damage,’ Fleming describes usually don’t match. Th at’s when we have de-
that damage as things that go ‘snap-crackle-
pop’—a burst pipe, a fi re, or similar—as op-
posed to slower, less dramatic damage that
occurs over time, like a slow leak.
“In the event a guest is injured in the lobby
Who is the defendant? It could be the unit
defends that unit owner. If the association is
ability policy will defend. If that’s exhausted,
How Are Claims Filed?
In the event of a covered event, insur-
ance claims and benefi ts don’t just show up
and shout, “We’re here!” Th ere is a process by
which insurance pays for covered items.
“Typically, the association contacts their
broker, who contacts the carrier,” explains
Seaman. “If it’s a fi rst party claim, with dam-
age only to the building, then it’s relatively
simple, because only the policy covering the
association is involved.
If there is damage to
individual units, insur-
ance carriers for the
unit owners are in-
volved as well, and re-
spective carriers would
make a determination
as to who is legally and
fi nancially responsible
for the damages. De-
terminations are made
between the respective
insurance carriers.” Th is is the normal course
Fleming adds that, “upon fi rst notice or
claim information, they acknowledge and
proceed to closure with an in-house adjuster.
Th e broker stays involved if the insured or the
In some cases, where responsibility for a
“Ideally,” says Fleming, “the third-party
adjusters will communicate. Th at’s ideal, but
just and come to an outcome alone, and that
lays, and the broker has to get everyone in a
INSURANCE
continued from page 1
“Th e unit owner
is responsible for
anyone or anything
that happens within
the unit.”
—Alex Seaman