Insurance FAQ |
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Finance Team
Revised 02/02/23
Please note that the answers given in this Frequently Asked Questions document (FAQ) are intended to give you a basic understanding of our HOA insurance coverage and our guidelines related to risk and insurance. This FAQ cannot give definitive answers for all situations because each insurance claim is unique and will be subject to the terms of our insurance policies. When in doubt, please check in with our insurance person on the Finance team.
Sections in this FAQ document:
Revised 02/02/23
Please note that the answers given in this Frequently Asked Questions document (FAQ) are intended to give you a basic understanding of our HOA insurance coverage and our guidelines related to risk and insurance. This FAQ cannot give definitive answers for all situations because each insurance claim is unique and will be subject to the terms of our insurance policies. When in doubt, please check in with our insurance person on the Finance team.
Sections in this FAQ document:
1. General
What’s covered by our HOA insurance?
Our general liability insurance policy exists to protect us in the event of a lawsuit resulting from injury or property damage. Our policy covers activities on all of Heartwood land and structures including the Common House, carports, workshop, common areas, outbuildings, hot tub, henhouse, tennis court, yurt, forest land, ag land, etc. Our policy covers the normal operations of our homeowners association, such as maintenance of our property. It also covers events such as falls on icy paths, hot tub accidents, or sledding hill injuries.
The policy states that specific exclusions do apply, including activities that are intentional, negligent, or illegal. In theory, if we are operating in good faith and with integrity, our policy will very likely cover us.
Our insurance covers damage to property owned by the HOA due to fire, theft, vandalism, snow load, wind damage, lightening, and electrical surges. Flood damage is not covered.
Since carports have shared ownership, carport insurance is covered by the HOA and then billed back to the respective carport owners. Carport insurance covers damage and liability of and in the carports.
Additional HOA insurance coverage:
- Directors and Officers insurance policy (D&O insurance) which specifically covers the HOA and its 'directors' (Steering Team and Finance Team members) for the impacts resulting from decisions made by these 'directors'
- Cyber Suite Coverage that, among other things, protects our electronic data
- Worker’s Comp Insurance (not just for employees)
Note that the HOA policy also includes coverage for the Kubota Tractor, the Kubota UTV, and the community owned solar panels.
What’s NOT covered by our HOA insurance?
The following items are not covered:
- private homes and other privately owned property
- commercial activities
What insurance coverage should members have?
Homeowners or renters wanting damage, theft, or liability insurance should have their own coverage for their home and its contents. Private homes and their contents, as well as liability in and around private homes, are not covered under the HOA policy.
All motorized vehicle owners (auto, ATV, RV, etc.) are personally responsible for their property and protection from liability caused by their vehicles and as such should have their own insurance.
Members engaging in commercial activities are responsible for their own insurance coverage and should consult their insurance agent to properly assess their risk and obtain adequate coverage.
Farmers selling produce, livestock or related products, onsite or offsite, are responsible for their own insurance coverage and should consult their insurance agent to properly assess their risk and obtain adequate coverage.
Can liability pass down from the HOA to individual members?
It is not likely that liability will be passed down to individual members. The HOA currently has what should be ample coverage for most any claim that would be made. However, liability can be passed on to anyone in theory depending on the nature of the legal dispute and how much responsibility the person has. For example, if someone driving the tractor seriously injures a third party, that third party could sue the HOA and the tractor driver. The likelihood of an individual being named increases with the amount of responsibility they bear and the amount of money involved. However, just because someone is named in a lawsuit does not mean that they will be found liable.
2. Gatherings
Are music events, parties, classes, and similar gatherings covered by our insurance?
Yes. Members and non-members can host events such as parties, concerts, and classes and they will be covered by our insurance in most circumstances. It does not matter whether the host or attendees of such gatherings are members or non-members.
May fees be charged for classes, concerts, or similar events?
Yes, fees may be charged, however, commercial activities are not covered by our HOA insurance so the host of such an event is encouraged to obtain their own event insurance.
The event host is required to:
Are waivers required for music events, parties, classes, and similar gatherings?
In general, waivers for most events are not required.
However, Event Host Liability Waivers and Participant Liability Waivers for classes that primarily involve physical activity (e.g., yoga, pilates, dance, etc.) are required. The waivers demonstrate that the instructor and participants understand the inherent risks associated with the activity and agree to assume responsibility for consequences of their own actions. The instructor is responsible for reviewing the event with the insurance person on the Finance team to ensure that all insurance issues addressed in this FAQ document are understood and followed.
Waiver templates are to be obtained from the Finance team or by clicking here for Event Host Liability Waivers or by clicking here for Participant Liability Waivers. The instructor is responsible for returning the signed waivers to the Finance team. For recurring classes, only one waiver is required for each person. The instructor and participants do not need to sign a new waiver for each session of the class.
Are non-member instructors required to have their own general liability insurance?
No, non-member instructors are not required to have their own general liability insurance, but they are encouraged to do so to protect themselves in the event of a claim.
What is our liability when alcohol is being served?
The HOA is covered for general liability when members host events even when alcohol is served so as long as alcohol is not sold. BYOB type events are also OK. No alcohol may be served to or consumed by minors.
In what situations is special event insurance required?
If a third party rents the Common House (or some other HOA property) and also serves alcohol, they are required to obtain special event insurance.
Is the HOA covered for liability incurred related to an illegal activity?
Policy language states illegal activities are not covered. However, in the case where a member is involved in some illegal activity, the HOA would still be covered because the HOA did not do anything illegal.
2. Gatherings
Are music events, parties, classes, and similar gatherings covered by our insurance?
Yes. Members and non-members can host events such as parties, concerts, and classes and they will be covered by our insurance in most circumstances. It does not matter whether the host or attendees of such gatherings are members or non-members.
May fees be charged for classes, concerts, or similar events?
Yes, fees may be charged, however, commercial activities are not covered by our HOA insurance so the host of such an event is encouraged to obtain their own event insurance.
The event host is required to:
- Make arrangements with the team responsible for the venue (Common House team, Land Stewardship Team, etc).
- Review event with the insurance person on the Finance team to ensure that all insurance issues addressed in this FAQ document are understood and followed.
- Sign an Event Host Liability Waiver stating that they assume all risk related to the event and will fully indemnify the HOA in the event of a claim. Waiver templates are to be obtained from the Finance team or by clicking here.
- Refrain from mentioning Heartwood in any marketing material or websites. It is essential that any commercial activities are clearly separated from Heartwood Cohousing or Heartwood HOA. (This is how our previous insurance carrier was alerted to activities they didn't feel comfortable with and dropped our insurance coverage.)
Are waivers required for music events, parties, classes, and similar gatherings?
In general, waivers for most events are not required.
However, Event Host Liability Waivers and Participant Liability Waivers for classes that primarily involve physical activity (e.g., yoga, pilates, dance, etc.) are required. The waivers demonstrate that the instructor and participants understand the inherent risks associated with the activity and agree to assume responsibility for consequences of their own actions. The instructor is responsible for reviewing the event with the insurance person on the Finance team to ensure that all insurance issues addressed in this FAQ document are understood and followed.
Waiver templates are to be obtained from the Finance team or by clicking here for Event Host Liability Waivers or by clicking here for Participant Liability Waivers. The instructor is responsible for returning the signed waivers to the Finance team. For recurring classes, only one waiver is required for each person. The instructor and participants do not need to sign a new waiver for each session of the class.
Are non-member instructors required to have their own general liability insurance?
No, non-member instructors are not required to have their own general liability insurance, but they are encouraged to do so to protect themselves in the event of a claim.
What is our liability when alcohol is being served?
The HOA is covered for general liability when members host events even when alcohol is served so as long as alcohol is not sold. BYOB type events are also OK. No alcohol may be served to or consumed by minors.
In what situations is special event insurance required?
If a third party rents the Common House (or some other HOA property) and also serves alcohol, they are required to obtain special event insurance.
Is the HOA covered for liability incurred related to an illegal activity?
Policy language states illegal activities are not covered. However, in the case where a member is involved in some illegal activity, the HOA would still be covered because the HOA did not do anything illegal.
3. Farming
Why is it important for all farming activities to be kept separate from the HOA?
Farm activities must be kept separate both in legal structure and with regard to insurance from the Heartwood HOA. We've had issues in the past with the Heartwood website associating chickens, eggs, goats, milk, crop sharing, etc. with the Heartwood community. This scared our insurance carrier at the time and made it very difficult for us to find affordable HOA insurance.
Currently there seems to be no carriers or insurance policies that extend coverage for both the needs of a HOA and the needs of a functioning farm operation in combination. Each category requires policy language that is specific to that category and each is covered by different types of carriers. Most insurance and reinsurance carriers cover specific types of risk they are comfortable working with. Insurance carriers typically do not deviate from the type of risk they are used to working with. Apparently farming is especially specialized because of the variety of operations and different levels of farm-related issues that carriers must rate exposure for.
How do we keep all farming activities separate from HOA?
The Heartwood website, all leases, covenants, etc. need to make it clear that the HOA does not engage in farming or producing farm products.
All farmers and farming enterprises must be private and exist as unique entities separate from the HOA. An entity may be a corporation, an LLC, an individual operating a business as a sole proprietor, etc.
Each entity must have a lease agreement with the HOA to show separation and to define roles and expectations. The lease is to include an indemnification clause stating that the HOA will be held harmless.
Can the HOA enter into a lease agreement with more than one farmer at the same time?
Yes.
In what situations are farmers required to have insurance naming the HOA?
Farmers selling produce, livestock or related products to only members are not required to carry insurance, but are encouraged to consult with their own insurance agent to see if it would be appropriate. In some cases, they may already be covered by their homeowners policy.
Farmers selling to non-members must obtain general liability insurance and provide a copy to the Finance team to be kept on file.
Are farmers required to obtain signed waivers from interns?
Yes, interns are required to sign a Farm Intern Liability Waiver. The waiver demonstrates that the intern understands the inherent risks associated with farming and agrees to assume responsibility. Waiver templates are to be obtained from the Finance team or by clicking here. The farmer is responsible for returning the signed intern waivers to the Finance team.
4. Use of Equipment
Who can operate the tractor or other power tools and equipment?
Anyone who has been trained and is qualified to operate them can drive the tractor or use power tools and equipment. They are covered by both our General Liability and our Inland Marine insurance policies.
An exception to this is that only members of the Heartwood Woodworkers Guild are permitted to use the major power tools owned by the Guild (table saw, drill press, chop saw, planer, jointer, band saw, etc.).
Anyone who is not a resident of Heartwood who wishes to operate the tractor or other power tools and equipment must sign a Non-Resident Equipment Operator Liability Waiver, which acknowledges risk and fully indemnifies the HOA. Waiver templates are to be obtained from the Finance team or by clicking here.
Are tractor operators responsible for damage they cause while plowing snow?
No. The HOA takes responsibility for damage caused by tractor operators who are plowing snow or doing other work for the benefit of the community. Our HOA insurance policy covers personal property damage and personal injury in these situations.
Note that if the community member is being paid for HOA related work (not being done on a voluntary basis), they are considered a contractor so the community member must sign our Contractor Liability Waiver and get the signed copy to the HOA Treasurer.
4. Use of Equipment
Who can operate the tractor or other power tools and equipment?
Anyone who has been trained and is qualified to operate them can drive the tractor or use power tools and equipment. They are covered by both our General Liability and our Inland Marine insurance policies.
An exception to this is that only members of the Heartwood Woodworkers Guild are permitted to use the major power tools owned by the Guild (table saw, drill press, chop saw, planer, jointer, band saw, etc.).
Anyone who is not a resident of Heartwood who wishes to operate the tractor or other power tools and equipment must sign a Non-Resident Equipment Operator Liability Waiver, which acknowledges risk and fully indemnifies the HOA. Waiver templates are to be obtained from the Finance team or by clicking here.
Are tractor operators responsible for damage they cause while plowing snow?
No. The HOA takes responsibility for damage caused by tractor operators who are plowing snow or doing other work for the benefit of the community. Our HOA insurance policy covers personal property damage and personal injury in these situations.
Note that if the community member is being paid for HOA related work (not being done on a voluntary basis), they are considered a contractor so the community member must sign our Contractor Liability Waiver and get the signed copy to the HOA Treasurer.
5. Home-Based Businesses
Are people running a home-based business at Heartwood required to have their own business liability insurance?
No. The HOA does not require home-based business owners to carry liability insurance, but they are encouraged to consult their own insurance agent to properly assess their risk.
Do other types of business need to have insurance?
This will depend on the type of business and the individuals' home insurance policy. Some policies will cover business activities and some will not.
6. Hiring Contractors
What's required when a team hires a contractor for HOA work?
When hiring a contractor for HOA work, get proof of their liability insurance or have them sign our Contractor Liability Waiver and get the signed copy to the HOA Treasurer.
What if the contractor is a community member?
If the contractor is a community member, have them sign our Contractor Liability Waiver, and get the signed copy to the HOA Treasurer.
7. Commercial Private Use of Community Resources
What's required when a community member uses community resources for private commercial use?
The community member must sign our Commercial Private Use of Community Resources Liability Waiver and get the signed copy to the HOA Treasurer.
This activity is not covered by our insurance. A community member using community resources for private commercial use is encouraged to consult with their own insurance agent to see what insurance may be appropriate.
Other documents regarding Private Use of Community Resources: