The coverage concerns with a building’s structural integrity

August 10, 2021

On June 24, 2021, Champlain Towers South in Surfside, Fla., partially collapsed in the middle of the night, claiming 98 lives and injuring several more. The cause of the tragedy still is uncertain, but according to Miami New Times, the structural integrity of the building may have caused the 12 stories to collapse.

Understandably, this has raised numerous concerns in the Surfside area about structural integrity for all buildings that sit in the same foundational premises of Champlain Towers South, and about whether building owners and managers are ensuring that their properties are up to code. And, many people—including insurance professionals—are wondering how commercial insurance policies address the building collapse and the liability claims that will follow.

Industry standards from ISO

The ISO’s CP 10 30 10 12–Causes of Loss–Special Form, excludes coverage for collapse, but does provide some coverage with the Additional Coverage–Collapse endorsement. But, even that endorsement has limitations. It’s critical to understand collapse exclusions and their exceptions in detail, so that you know what coverages may or may not be provided if a disaster strikes your clients’ condo.

What can we glean from the Surfside collapse?

It is suspected that structural integrity caused Champlain Towers South to partially collapse, causing tragic loss of life and injuries. It’s uncertain whether the building manager and owners of Champlain Towers South were aware of any structural issues with the building before the collapse, but as investigations continue, one thing is certain: it’s imperative for property owners to understand how their insurance policies will cover them if their property collapses.

Based on the ISO’s exclusions for collapse, a building’s collapse may not be covered by an insurance policy.

Condo association & unit owner coverages

Probably one of the most misunderstood forms of home ownership today—condominium ownership—presents a wide variety of issues and concerns. Insuring condos properly involves copious work and information, and if the insurance is written properly, the premium probably will be greater than a homeowners policy.

Before your client buys a condo and insures it, it’s important that he or she knows the responsibilities as a unit owner and as a member of the association in which the condominium participates.  And, it’s imperative that you can provide your client with the proper coverage to insure against the losses he or she may endure. Associations have problematic powers of assessment that could leave your client exposed in the event of a disaster—and that doesn’t just include building collapses. It includes hurricanes and wild fires, too.

You can learn more

It’s critical that you review your clients’ insurance coverages with them so they are protected if a disaster happens, including a building collapse, a hurricane, a wild fire or any other loss that may put their investments at risk. To that end, you need to understand the potential limitations your clients’ condo association puts on them.

To learn more about ISO’s coverages and exclusions for associations and unit owners, register for Condos, Co-Ops and Other Community Associations, which takes place Tuesday, Aug. 31, 2021, 9 a.m.-noon, with Steve Lyon, CPCU, CIC, CRM, CRIS, AAI, ARM, AIS, MLIS, AFIS. This class has been approved for continuing-education credits in Connecticut, New Hampshire, New Jersey and New York. To sign up for this webinar, access your state’s PIA education schedule.

About the author…

Steve Lyon

Steven D. Lyon, CPCU, CIC, CRM, CRIS, AAI, ARM, AIS, MLIS, AFIS, TRIP, has more than 35 years of agency-management experience owning, operating and managing an independent insurance agency. He uses his experience to conduct more than 150 insurance-related classes each year for agencies and companies throughout the U.S.

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