Ok, so you’ve dressed-up your property by stepping up the maintenance/repair regimen for your buildings and you’re thinking, the underwriters love me now, right? Well, not so fast. There are some important risk management measures you need to ensure are in place from a liability perspective as well.
Multi-family risks pose some unique liability exposures related to bodily injury and/or property damage to a third party (ie tenants, unit-owners and visitors, etc.). Potential claims include injuries from slip/falls, fires, or the actions of a contractor performing services on-site, etc. 
So how do we mitigate the potential for such things? What follows, as with the property issues I discussed, constitutes only a partial list, but it is representative of what I have most commonly seen as issues in the current market:
- Contractual liability risk transfer-perhaps more than any other issue, underwriters are placing heavy emphasis on ensuring that parties who come on-site to perform work on behalf of an apartment/condo association/co-op are held accountable, contractually, for their negligence if their actions result in bodily injury/property damage to a third party. This includes snow removal contractors, landscapers, and contractors performing any other type of work on premises. In such instances, make sure a contract is in place which outlines the scope of work being performed and includes the following:
- Indemnification– states that the contractor will compensate you in connection with any damages or losses you experience due to the contractor’s negligent acts
- Hold harmless– an agreement in which the contractor agrees not to hold you legally responsible for the risks involved in the work they are performing
- Additional insured– you should require the contractor to name you as additional insured on contractor’s general liability policy
- Contractor should include minimum limits of $1mm per occurrence
- Contractor should furnish a certificate of insurance (COI) which includes the additional insured language
- COI should reflect a current, in-force policy for the duration of work performed
- Make sure that cracked or uneven sidewalks are repaired promptly, to avoid potential slip/fall-type claims
- Make sure that sidewalks are salted when there is ice or snow
- Make sure that exterior lighting is adequate
- Make sure there is restricted entry to the building, ie keypad entry, etc.
- Exterior video cameras-they can help deter crime and provide valuable information in connection with crimes which do occur, slip/fall related claims, etc.
- When something does happen, have an incident report prepared as soon as possible, including the date/time it occurred, details of what happened, etc.
So there you have it. Want to be more a more attractive risk to the insurance market? Implement these basic measures, as well as those outlined in Part I and you will be on your way.
And while it may not be possible to prevent liability claims from occurring, their magnitude-and their impact on your policy renewal-can be mitigated by employing these basic measures. And boy will you look attractive!
Images by Mikael Blomkvist and Kseniachernaya on Pexels
About the author:
Mike Smith provides insurance brokerage and risk management guidance to apartment building owners, condo associations, and cooperatives all across the New York Metropolitan area.
Drawing on over 27 years of experience in the business, as well as Rue’s extensive resources, Mike provides a thorough and consultative approach to my clients’ commercial property/casualty insurance needs- with the overall aim of ensuring the broadest protection at the most competitive cost.
