How townhouse and condo association insurance protects your organization

April 24, 2025 | Insurance 101

This article was originally published December 21, 2023

What’s often called “business insurance” is equally important for entities that might not consider themselves businesses. Townhouse associations and condo associations need to shield themselves from the financial fallout from lawsuits and losses, such as damage to association property. Townhouse and condo association insurance can provide that protection. 

What policies are needed, and how do you secure condominium association insurance coverage? What does a condo association insurance policy cover? Which policies are considered important insurance for condo associations? Read on for details.

Woman displays map of HOA

Condominium association insurance scenarios: could these incidents impact your organization?

If your organization has never been sued or suffered a loss from something like storm damage to property you own, it’s understandable that you might think there isn’t a big need for insurance for condo associations. However, entities like yours are frequently sued by people and organizations who feel the organization is responsible for an injury or other incident. And, of course, you never know when severe weather will strike, or someone will accidentally or intentionally damage your property. So, you should have condominium association insurance for financial protection.

Common incidents where insurance for condo associations can cover costs include things like:

  • Someone hosting an event in an association-owned building slips on the icy steps, falls, and breaks their arm. They sue the entity for the cost of their medical bills for failing to ensure the sidewalks and steps are safe.
  • The credit card number a condo association member provides when paying their dues is stolen by hackers and used to commit fraud. The member files a lawsuit to compel the association to pay for the financial repercussions.
  • A townhouse association owns a pickup truck used by its maintenance team. An employee driving that vehicle causes an accident, and the other party sues to cover their medical bills and car repair costs.
  • Vandals break windows and cause other property damage at a pool/clubhouse facility owned and operated by a condo association.
  • A townhouse association member sues the entity’s officers, claiming they have used dues improperly.

Thinking about the many incidents that can affect associations can be eye-opening and concerning. The good news is that having adequate condominium association property insurance and other coverages can protect you if an incident occurs. Not only does that mean a potentially devastating expense might be covered, but it also helps association leadership sleep better at night!

What does a condo association insurance policy cover?

At biBerk, rather than offer one comprehensive condo association insurance policy, we provide several policies—each designed to address different risks. Which do you need for your condo association or townhouse association? That depends on the specifics of your organization and how it operates.

Our licensed insurance experts are happy to learn about your entity and its risks and recommend appropriate coverage. This includes policies, policy limits, and any add-ons needed (like additional protection for condo or townhouse association directors and officers).

Associations typically need some or all of the following business insurance policies:

  1. General liability insurance. Also called commercial liability insurance, this type of insurance covers damages and legal costs associated with incidents like injuries to non-employees (slip-and-fall accidents, for example) and property damage. It also covers libel, slander, and copyright infringement. Plus, you can add endorsements to customize your general liability insurance policy, including cyber, employment-related practices liability, directors and officers (D&O) coverage, and others.
  2. Business owners policy (BOP). Also called property & liability insurance, this association insurance policy conveniently combines general liability insurance with coverage for the space you operate out of and any property you need to run your organization. It also covers operational interruption, such as costs to continue or resume your work following a covered loss. You can tailor your BOP with add-ons, including things like cyber, employment-related practices liability, and directors and officers (D&O) coverage. 
  3. Cyber insurance. Purchased as an add-on to a general liability policy or BOP, this type of coverage can pay for costs related to system hacks or data security breaches where someone steals sensitive information and uses it to commit fraud or is likely to do so.
  4. Workers' compensation insurance. If your association has employees, your state probably requires you to have workers’ comp coverage. It pays for medical expenses and lost wages from on-the-job injuries or illnesses. It can also pay a “death benefit” to the family of someone who dies at work.
  5. Commercial auto insurance. Some condo and townhouse associations own or lease vehicles. If yours does, this policy protects the entity if someone driving one of your vehicles is at fault in an auto accident that causes third-party property damage or injuries.
  6. Umbrella insurance. Every liability insurance policy has a maximum value that it will cover in the event of an incident. Umbrella insurance adds another layer of protection, covering costs exceeding the limit of another biBerk liability policy up to its own limit.

Getting the right policies with the right limits is vital to protecting your association. Are you covered?

Who relies on biBerk for condominium association insurance coverage?

We work with people in many roles related to condo associations.

Association board members
Board members trust us for condo association insurance that protects the organization’s assets. Having adequate insurance helps the entity avoid legal hassles and financial headaches. Carrying insurance can also help keep you in compliance with any state or local regulations that affect organizations like yours. And board members appreciate that our licensed insurance experts can help them understand exactly what their policies cover, as distinct from the insurance that residents have.

Property managers
We get high marks from property managers for many reasons, including that we’re attentive and responsive when it comes to handling claims. They also like that our policies are clear about what’s covered and not covered. Insurance for condo associations should be easy to understand, because busy property managers don’t have time to digest long, confusing insurance documents.

Real estate developers and investors
Although their involvement with a condo association tends to decline once the units are occupied, real estate developers and investors understand the importance of condo association insurance. Consequently, they’re happy to see a townhouse or condo association get coverage from a trusted provider like biBerk.

What does condo or townhouse association insurance cost?

Several factors affect your insurance cost. They include things like your association’s claims history and others. But, generally speaking, you can get hundreds of thousands of dollars in coverage (or more) for as little as hundreds annually.

To find out specifically what you’ll pay, you can get instant, self-service association insurance quotes online at your convenience. You can also purchase policies, report claims, and manage your policies on our website.

Should you ever have questions about condo association insurance, our licensed insurance experts are here for you!

Keeping your condo association or townhouse association insurance current

Having insurance to cover all the risks your association faces is essential. But purchasing policies isn’t the end of the story. It’s critical to review your coverage regularly to determine if any modifications are needed.

For example, if your association builds a new community center, you’ll need to ensure your entity is protected from liability arising from its use. Or if you start accepting credit cards for the payment of dues and you don’t already have cyber coverage, you will probably need it.

It’s quick and easy to ensure you have the right insurance policies, especially with the help of a biBerk insurance expert. They can ask crucial questions and determine if you should make any coverage changes.

We encourage you to review your townhouse or condo association’s insurance policies at least annually and take action if needed.