One of Johnny Carson's greatest bits was when he donned a cape and turban and became the Great Carnac. The Great Carnac had the ability to divine answers to unknown questions. If the Great Carnac was real, he probably would have made a nice living as an insurance agent. Presumably, your insurance agent does not have the same mentalist powers as the Great Carnac. Because of these limitations, it is incumbent on you to actually ask the questions that the Great Carnac would otherwise divine. read more

In almost every walk of life, knowledge is something people seek to obtain. Francis Bacon famously, and succinctly, coined the phrase "knowledge is power." But in the topsy-turvy world of insurance, another famously succinct phrase may be more applicable, "ignorance is bliss." (Thomas Gray). read more

Many of you have probably read or heard about the tragic accident in Berkeley, California, where a residential balcony collapsed killing six students. http://www.cnn.com/2015/06/23/us/berkeley-balcony-collapse-dry-rot/. According to reports, the balcony collapsed due to beams that were "extensively rotted" and balconies that exhibited "significant rot and decay." We have encountered many clients and potential clients whose decks and buildings exhibit similar rot. Fortunately, accidents such as the one in Berkley are not frequent, but they do present a significant risk to homeowners and homeowners associations. It is often the case that associations are responsible to maintain decks and balconies as limited common elements. If they are not properly maintained, a maintenance obligation can quickly become a significant liability concern for the association. If an association discovers rot in its buildings, it has several options. If the association is within the applicable statute of limitations, it may have a claim against the builder and/or its subcontractors. For older projects outside of the statute of limitations, the options are more limited. Homeowners associations can assess the owners or possibly secure a bank loan. Neither of these options are particularly popular. Another possibility is to pursue the first-part property insurance procured to cover the association's property. Many of these policies provide coverage for "collapse." Fortunately, associations may not have to wait until an actual collapse such as the one in Berkley to secure coverage. In Queen Anne Park Homeowners Association v. State Farm Fire and Casualty Company, the Washington Supreme Court recently confirmed that when insurers do not specifically define collapse, the term is interpreted to mean "substantial impairment of structural integrity." Translating that into English, the court ruled that a building (or parts of a building) do not actually have to fall down in order to be covered as a "collapse." Associations should be mindful of their maintenance obligations. If rot or damage is discovered, associations should act quickly to protect the safety of its residents and to avoid a significant liability risk to the association. If an association discovers rot or decay, Barker Martin is happy to provide a free consultation to ensure the association knows all of its options. read more

Serving on a community association board is often a thankless job. In addition to the long hours and low pay (ok, no pay), there are myriad problems that a board member has to deal with. The governing documents (hopefully) spell out the board's responsibilities for the association. If something goes wrong, most associations have Directors' and Officers' insurance ("D&O Insurance")1 available to protect individual board members. D&O policies are meant to cover any "wrongful acts" committed by board members. While the term "wrongful acts" may sound sinister, the definition typically includes "any negligent acts, errors, omissions or breach of duty committed by an insured in their capacity as such." Hopefully, when a board or individual member of the board neglects to undertake a given responsibility, the D&O Insurance will provide a safety net. But what if one of those responsibilities is buying insurance in the first place? Nearly all governing documents for community associations require the association, through its board of directors, to purchase various types of insurance. Depending on the language of the governing documents, the required insurance may apply to common property, unit owner property, and the liability of the association, board, and unit owners. Obviously, if the board neglects to purchase D&O insurance, there is no safety net anyway. But what if the board either purchases the wrong kind of insurance, or no insurance, for the property and/or liability of the community as required by the governing documents? Surely, that would qualify as a "negligent act, error, or omission" of the board, wouldn't it? In the real world, the answer to that question is certainly yes. Unfortunately, insurers have closed the door on this type of claim. There is a standard exclusion in D&O insurance, which excludes "any failure to effect, maintain or procure any insurance policy or bond, including any failure to obtain proper amounts, forms, conditions or provisions on any insurance policy or bond." While D&O insurance does offer a safety net for board members in some situations, that net will be abruptly yanked away when it comes to purchasing the right insurance. Board members should pay special attention to the insurance requirements of the governing documents. If necessary, they should consult with their broker and/or their association attorney. If they don't, they are walking a tight rope without a safety net. 1. D&O insurance shouldn't be confused with Errors and Omissions ("E&O") insurance. The former is meant to cover directors and officers of an entity for their wrongful acts. The latter is typically meant to cover companies and their agents in the rendering of professional advice or services. read more

Did you know for that same $150 to $200, you can probably purchase a personal umbrella insurance policy? read more