The best types of Master Policies include adequate insurance to cover property and liability to others damage.
An HOA insurance policy will include Property coverage for the buildings/exterior structure and Liability coverage for others claims against the association.
But there are some additional types of coverage that are just as important and need to be included on the policy as well.
Fidelity or Employee Theft Coverage:
This is to protect the HOA from loss by a person handling the association’s funds that are made up of the monthly fees. This coverage is required by law in some states. In a world where almost anyone could get too greedy this is good coverage.
Directors and Officers Coverage:
Every HOA pretty much has a board of directors and is usually volunteers...this is great coverage to have to make sure they do not have the burden defend themselves in case of a claim.
If unit owners are not happy with decisions of the board and feel they are being negligent regarding the best interests of the HOA, they can sue for damages. Directors and Officers coverage will respond to such claims.
Water Damage Coverage:
Since an HOA is responsible for the structure of the building, claims related to water damage fall under its responsibility.
Leaking or burst pipes could cause damage to several units. Coverage can be provided on the property policy.
However, a large number of claims can drive up the ratio of paid-out losses to premium, so the best management technique to use here is prevention. Inspection and maintenance of pipes prior to the cold weather could be a much less expensive way to prevent claims.
HOA insurance also has a high loss assessment deductible which may be a burden on some of the residents in case of a claim... make sure your condo insurance policy covers that...
One final thing, in recent years due to the cost of insurance premiums going up, most HOA insurance has transferred the cost of insurance to unit owners... one area is the cost to rebuild the interior has been eliminated from many policies... check your policy for the limits for coverage A on your policy...