HOA pool

HOA Community Pools: Understanding D&O Insurance Coverage

Summer has arrived, the public is slowly emerging from state and local lockdowns, and community association and HOA pools across the nation are opening. Unfortunately, if it weren’t enough to deal with the uncharted territory Covid-19, we’re dealing with understanding how it affects the insurance world and policyholders. 

Homeowner associations and community associations need to manage new guidelines and liability. It’s a double-edged sword because whether directors and officers choose to keep facilities closed or re-open, they’re dealing with unfamiliar liability in both cases. 

HOA pools: The compliance issue

One of the big questions in choosing to open or keep HOA pools closed is compliance. If associations decide to open, can they comply with federal and state restrictions and follow public health recommendations?

The Center for Disease Control and Prevention’s latest report says that there is no evidence that the coronavirus can spread to people through the water in pools, hot tubs, spas, or water playgrounds. They say that proper operation and disinfection of pools, hot tubs, or water playgrounds should make the virus inactive in the water.

This is good news from a medical standpoint, but what does it mean for compliance? In Texas, the governor signed an executive order allowing pools to open. However, an executive order does not give the board the BOD or the CAM immunity for opening pools based on the order. The order does not usurp local prohibitions. The Board of Directors should check their general liability coverage before opening. If the decision to open is challenged, there is likely no coverage under the D&O policy. 

Coronavirus and HOA insurance

Being in uncharted waters means we’re in best guess territory. With no case histories to compare to, we can only take what we know about the past and apply it best we can to the future. There’s no doubt the coming years will be filled with creative lawyers and insurance companies battling it out over coronavirus insurance issues.

However, there is no insurance coverage for pool openings. By opening a pool, boards are assuming significant liability they do not need to. The liabilities have the potential to be budget breakers, and most likely, costs will come out-of-pocket.

At this point, from what we know about the past, it might be challenging to get coverage for the following in relation to coronavirus:

  • Property Damage
  • Testing and Remediating Costs
  • Business Interruption
  • Workers Compensation

Following best practices mitigates liability

Faced with increasing pressure from HOA members to re-open pools, HOA directors and officers are turning to CDC recommendations to mitigate risk and avoid litigation from frustrated members.

The CDC social distancing guidelines can be applied to a swimming pool environment by:

  1. Establishing a maximum number of people allowed in the facility at one time
  2. Setting up blocks of pool time for community members to reserve
  3. Establishing a reservations method 
  4. Establishing a disinfecting schedule

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Community association directors & officers protection

In uncharted times, you need all the protection you can get. McGowan Program Administrators (MPA) Community Associations Directors & Officers Program protects the individuals who voluntarily serve on association Boards of Directors and well as the association. This can include employees, committee members, managers, and other volunteers. Learn more.

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