Every condominium declaration contains specific language relating to insurance.  What does yours say?

State statutes vary.  In Washington State, common interest communities are required by law to carry certain types of property insurance that serves as primary in the event of a loss; however, the responsibility for paying the claim deductible is often an owner responsibility. 

The Damage / Loss Flow Chart below is applicable to the general responsibilities outlined in multiple condominium governing documents, but keep in mind that your specific governing documents may have their own nuances.   READ: How to Avoid Insurance Gaps


1) unit/homeowners are almost always responsible for in-unit/home losses up to the association's primary insurance deductible

> IF something in Unix X causes a loss, Unit X is probably responsible for costs up to the association's primary insurance deductible

2) except for #1, responsible parties for losses within a deductible limit are generally in proportion to the areas damaged

3) governing documents typically require owners to carry insurance that covers any potential deductibles and loss assessments for ANY insurance coverage held by the Association including optional coverage such as earthquake and earth movement

4) While a Board often has discretion to file claim, the responsibility to restore a loss is governed by statute and your declaration.

>>> Does your association MONITOR and ENFORCE owners' insurance requirements?  It's an often overlooked risk.





EXAMPLE Insurance Coverage Explainer


Key Terms / Insurance Coverages

Business insurance is a general term that includes a gamut of different coverages.

General Liability insurance covers certain types of bodily injury and other liabilities.  Many General Liability policies include $5,000 of no-fault liability coverage where the insurance carrier pays up to $5,000 without the need for litigation.  

Workers' Compensation insurance often excludes volunteers.  Five states (North Dakota, Ohio, Washington, West Virginia, and Wyoming) run their own programs for workers' comp coverage.   Washington State Department of Labor & Industries (L&I) does not offer coverage for volunteers.

Many CICs do not realize that they possess little to no insurance coverage for bodily injuries incurred by their volunteers.

READ:  What Is Not Covered by a D&O Insurance Policy? 

READ:  Does my Association Really Need D&O Liability Insurance?


Washington State Administrative Code (WAC) clarifies statutes related to workers' compensation and risk classifications.  

Condominium and HOA employees are generally included with either Classification 4904 (clerical) OR the much broader (more expensive) Classification 4910 (property management services).

WA State L&I also tracks hourly wage rates for specific risk classifications that may receive alternative forms of non cash-compensation2022's average wage for class 4910 = $33.50/hour. 

Notably, according to WAC 296-17-31018(4), many classifications (incl. 4910) exclude coverage for alterations and new construction.  

Alterations are changes made to a building during its remodeling, such as increasing or reducing floor area, making or closing openings, erecting or demolishing walls, etc. 

WA Employers' Guide to Workers' Compensation Insurance

Workers' Compensation Coverage: 

Questions to Ask

What type of job is the employee going to perform?  [These are examples from Washington State]

If they are performing jobs that are maintaining or repairing the existing property, such as replacing windows, plumbing, flooring, or repainting, you would report them in 4905 or 4910. See examples below.

If they are performing jobs adding new construction or altering the interior of an existing building from an earlier condition (remodeling), or enlarging an existing structure by building and attaching rooms (new addition), you would report them in the applicable construction classification. See examples below.



Construction contractors who own and manage their own rental properties must report all construction, maintenance and repair activities in the applicable construction classification for workers preparing properties for initial occupancy or to sell. When properties are ready for  occupancy, any future maintenance and ordinary repairs performed by the construction contractor’s workers may be reported in 4910, if applicable.

Washington State: Insurance for Volunteers

Learn how Volunteers Are (NOT) Covered

Volunteers RCW 51 & WAC 296-17-930
Volunteer Coverage, WAC, Policy 61.01, Including Reporting


EXAMPLE Damage & Loss Language for your Declaration
Illuminate YOUR Community!  Connect with the SMAARTE Group!