Jon H. Epsten, Esq., Author at Epsten, APC

Important Tips with Purchasing Insurance

One of the most important roles a board performs is the purchase of association insurance protecting the association’s assets and its directors, officers and committee members. Be mindful that most Directors and Officers insurance policies EXCLUDE coverage for the failure of the board to purchase adequate insurance.

Oftentimes I find that association boards spend more time on landscaping issues (e.g., tree trimming, grass cutting and watering) than the purchase of the association’s insurance. In the board’s defense, the squeaky wheel gets the oil and most owners, and oftentimes the board members, care much more about the landscaping than they do about the adequacy of the association’s policies. For this reason, the focus on insurance often becomes secondary to the cosmetic issues an association faces. Not making insurance a number one priority can have devastating consequences to an association. A book could be written on how to make certain your association has adequate insurance!

Let me offer a few basic tips:

Use insurance agents who are well versed in association insurance.
Review the insurance application and be certain that known or threatened claims have been carefully reported.
Have the insurance agent perform policy comparisons showing the different coverages in each policy being offered.
Ask questions of the insurance agent, don’t assume he/she knows your association’s liability risks (e.g., association having responsibility to insure an easement area).
Talk to your insurance agent about the different types of policies available such as earthquake and cyber insurance.
Do not make your decisions based on the amount of the premium but rather on the quality of the coverage.
Don’t save money by buying lesser insurance – your association will get what it pays for, guaranteed.
Always ask your agent in writing, “Do you have any recommendations on coverage?” Your agent should provide a letter stating that he/she has reviewed the coverages and the coverages comply with the CC&RS and the law, thus placing the onus on your insurance agent.
Lastly, meet with your agent no less than annually to check on the health of your insurance coverage.

I urge boards to make insurance a priority and devote the necessary time to make certain the best possible coverage is in place.

Jon H. Epsten, Esq. – 2016 Best of the Bar

Congratulations to Jon H. Epsten, Esq. who has again been selected as one of the San Diego Business Journal’s 2016 Best of the Bar attorneys! 2016 SDBJ Best of the Bar

Jon’s Best Phrase as published in the April, 2016 San Diego Business Journal: “Nothing good happens after midnight.”
And, his Little Known Fact: “I am a strong proponent of recycling.”

"Catch & Counsel"

An interview with Jon Epsten as seen in the March/April edition of CAI National’s Common Ground Magazine, p. 54.

View the digital edition here.

Insurance Renewals & Notices of Facts Which May Lead to a Claim

By Jon H. Epsten, Esq. & Mary M. Howell, Esq.

We are seeing with more frequency associations either carelessly completing insurance renewal applications, or allowing an uninformed insurance agent or broker to complete the application form for new or renewed insurance, without making sufficient inquires of the board and management about actual or potential claims. This is particularly important in the context of directors and officers liability insurance.

Liability Definition

In this type of policy, insurers often deny coverage either by alleging the company was not put on notice of facts which might lead to a claim (such as a request for IDR or ADR), and/or failure to disclose a potential claim on the application for insurance. While the initial denial of coverage may be subject to challenge by the association, it is better practice to notice the carrier of any negative input from owners–even if that means a letter a day!

We also encourage boards and management to take the renewal process seriously, rather than treat the process as a routine ministerial act. Encourage your insurance agent or broker to become actively engaged in the insurance application process and claims reporting process.

The result of not properly reporting information to the insurance company can have devastating financial consequences on an association.

Insurance Claims: Proper Submission

By Jon H. Epsten, Esq.

For those of you who have been involved in managing or sitting on a board of directors for a community association, you are aware that the association typically makes an insurance claim through its insurance agent. For many years, this has been an acceptable method for submission of insurance claims; however, there are pitfalls to making the claim directly to the insurance agent which could result in denial of an insurance claim or the insurance claim never being received by the insurance company. Here are some suggestions on how to properly tender an insurance claim to an insurance company.

Continue reading Insurance Claims: Proper Submission →