Are You Covered? Six Guidelines for High-Rise Insurance

High-rise living combines all the comforts of home with the convenience of staying at a first class hotel. Fitness centers, 24/7 security, high-speed internet and a friendly front desk staff are just a few of the reasons why high-rise living is becoming more and more popular. While there are many advantages to the high-rise lifestyle, there can be challenges when it comes to insurance.

“We find that residents and board members who live in high-rise buildings are sometimes unaware of the specific kinds of insurance coverage they need to stay protected,” said Andrew Lester, president of FirstService Financial, an organization that offers best-in-class banking and insurance solutions solely to FirstService Residential-managed properties. “If a loss occurs and you are not covered properly, it can have a financial impact on the unit owners and shareholders of condominium and cooperatives.”


Here are a few guidelines that can help to ensure that your building is properly covered.
  1. Get expert advice.  It is extremely important to use a professional broker that has experience with high-rise buildings. “Agents can make costly mistakes if they don’t have adequate experience in the high-rise world,” stated Lester. For example, an insurance agent who is familiar with the construction industry, is not necessarily an expert in high-rise buildings.” Condominiums are subject to unique laws and regulations. The required coverage that can differ based on the state and region. It is important to find an agent with specific knowledge of the condo industry in your local market.
  2. Make sure the gaps are closed. Unit owners and boards can look to their governing documents to determine financial responsibility in the event of a loss. We recommend that the building’s attorney and the board review the by-laws and proprietary lease together. This helps to ensure that everyone has a clear understanding of how the building’s carrier will respond.
  3. Know that value matters more than savings alone. Experts caution against any decisions based just on premium. Finding an extremely low-cost policy is possible but will the coverage be adequate? Are there gaps that expose you to risk? Is the deductible onerous? Is the program the right fit?

    Consider the value of your insurance policy. Regardless of the savings, if your policy isn’t strong enough to make you feel secure, it’s not worth it.
  4. Examine all types of coverages
    • Workers Compensation & Disability Workers compensation and disability coverage is statutory in New York.  
    • Fidelity aka Commercial Crime and Directors & Officers Liability Crime coverage, which protects your condo or co-op from certain occurrences of theft, is a required coverage. The policy covers the board and adds coverage for the managing agent. We recommend that you review the building’s financials to determine the required limit.
    • Directors & Officers Liability High-rise board members are generally required to purchase a Directors & Officers liability policy. This coverage protects your board and building staff from legal damages in the event of a lawsuit against the condo or co-op. The D&O policy is intended to cover wrongful acts by the board and should cover employment practice liability.
  5. Conduct an annual review.  An expert should review insurance policies for both the building and the board annually.
  6. Hire a good property management company. The right property management company can make all the difference. An organization with a national presence will have the depth of resources to offer both risk management insight and negotiated rates through buying power. They can also connect you to the proper insurance brokerage firm – one that has the extensive knowledge of the regional statutes and regulations that effect the type of insurance you need.
Are you a board member interested in learning how FirstService Residential can help you sleep better at night? Then contact us today at news.ny@fsresidential.com