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Insurance Coverage vs. COVID-19 HOAs May Be Left Holding the Bag BY A J SIDRANSKY August 2020 NEWENGLANDCONDO.COM erage—calibrate new crises into risk analysis going forward. As carri- ers re-evaluate potential claims from COVID-19 and any future pan- demics, the actuaries will have to figure out what such new variables mean in terms of risk exposure—and, by extension, coverage options. “Many carriers took the experiences of the SARS and ebola \[out- breaks\] and used them to write some verbiage into policies, so that in- sureds and insurers would be clear on coverage,” says Fleming. “Now, 205 Lexington Avenue, NY, NY 10016 • CHANGE SERVICE REQUESTED continued on page 6 THE CONDO, HOA & CO-OP RESOURCE CONDOMINIUM NEW ENGLAND Residential communities such as condos, HOAs, and co-ops are unique in that they take the governance of their properties into their own hands. While most properties do have managing agents to oversee staff and to handle the day-to-day operations, ultimate- ly, it’s the board of directors or trustees that makes policy and determines the continuing health of the community. Board positions are filled by unit owner or shareholder volun- teers—the positions are almost universally unpaid. Community members give of their time and expertise freely, and with the intent to do their ‘civic’ duty and protect the invest- ment of themselves and their neighbors. Often, residents with specific skills rel- evant to governing and managing property are ready, willing, and able to contribute their knowledge to the community. Boards often feature a concentration of attorneys, accountants, and business management pro- fessionals. But even these competent indi- viduals still have much to learn and absorb when they are elected to the board. Every building and community has a history and a set of circumstances all its own. That’s a compelling thing about real estate: every property is unique. So how should new board members get, well, onboarded? Should they take a course through the Community Associations In- stitute (CAI) or some similar local support organization for multifamily boards? Should building management or the building’s at- torney and accountant hold an orientation to bring them up to speed? Should an existing board member mentor a new member and debrief them on the ins and outs, the do’s and don’ts of the building? Turns out, just as in- dividual properties have their own cultures and challenges, they also have their own processes for orienting new board mem- bers—though of course, there is also a lot By its very definition, insurance coverage is planned protection against both the expected and the unexpected. Life insurance clearly provides financial security in the event of death, which of course is an eventual certainty. But at the same time, it also provides for circumstances in which someone’s passing is early or sudden. On the other hand, something like flood insur- ance provides protection against a ‘known unknown’—a potential threat that can be prepared for to some degree through intelligent analysis of risk. As such, insurance is a generally ac- cepted method of handling potential risk in the business world. Pay a little now, and get what you need to cover the cost of the unexpected later, when and if you need it. Condos, HOAs, and co-ops properties and owners are well acquainted with this business practice and carry several types of insurance to cover all kinds of possible emergencies. So… how does that shake out in the current COVID-19 crisis? Responding to the Unknown While insurance policies are forward-facing—meaning they attempt to manage future risk—they are based on past data, such as how probable similar events were in the past, and how past experience can help us manage the same or similar circumstances in the future. How- ever, when it comes to something as unprecedented as the current pandemic, insurance carri- ers are in new and uncertain territory—often to the detriment of those looking for coverage. Ryan Fleming is a partner at JSG Insurance, with offices throughout the Northeast. He ex- plains, “Insurance policies in general aren’t designed to respond to something like this. It’s trig- gered by a sudden, accidental, unexpected occurrence. In this case, with this type of pandemic growth, policies aren’t really designed to cope with it.” Insurance actuaries—the statistical scientists who calculate and interpret risk on behalf of insurance companies to help them set premiums and determine the extent (and limits) of cov- Whether you live in a super-luxe Park Avenue co-op in New York City, a beach- front condo in Florida, a sprawling HOA in Nevada, or a multifamily community in the Berkshires, one thing is certain: you have neighbors. Hopefully they’re the people you grill with on a summer afternoon; the pro- viders of a spare cup of sugar when you run out; the folks who water your plants when you leave town … some even might have at- tended your child’s wedding or helped you through trying times. But regardless of the size, location, or overall cohesion of your community, at some point you’re likely to have at least one neighbor who disrupts the harmony and infringes on the peaceful en- joyment of your home. While most of us in multifamily hous- ing have come to accept this inevitability as a cost of communal living, there are some situations that cross the line from minor nuisance to legitimate harassment. Know- ing the difference is important—but it can be tricky to discern, and even more difficult to address. After all, ‘harassment’ is a term that gets thrown around a lot, but is often a subjective disputation. One person’s ‘persis- tence’ or style of conflict management can be another’s criminal complaint. Harassment: Difficult to Identify, Harder to Prove Adding to the interpersonal complexity, the legal system deals with harassment in different ways, depending where you reside and the type of harassment being alleged. Laws on harassment vary by state, and levels of criminality can differ within those juris- dictions. In New York State, for example, accord- ing to several attorneys consulted for this article, there is no civil cause of action for harassment. That means that any action taken against an accused harasser must be pursued as a criminal case. Depending on a number of factors, the harassment can be prosecuted as a misdemeanor, a violation, or a felony. Under New York’s Human Rights Law, sexual harassment, discriminatory harasse- ment, or any type of harassment that rises What New Board Members Need to Know (And How to Learn It) BY A J SIDRANSKY Handling Harassment in Multifamily Housing When Trash Talk Turns to Transgression BY DARCEY GERSTEIN continued on page 8 continued on page 7