Insuring Amenities Don't Make Luxury a Liability

Like beauty, what constitutes an 'amenity'—particularly a 'luxury' amenity—may well be in the eye of the beholder. Young families may want indoor and outdoor play equipment, while professionals may appreciate a well-appointed gym, and seniors might gravitate towards card rooms and social halls. All of those and more are examples of what may be considered an amenity, and whether built-in from the beginning or retrofitted later to meet resident demand, they add value—both real and perceived—to the properties that have them. 

But with any amenity, be it something as simple as a basketball court or as complex as an indoor pool or rock climbing wall, comes potential liability. Making sure your building or association has enough of the right kind of insurance coverage for its amenities is a crucial part of your board/management team's job. 

Not Your Grandma's Amenities 

Swimming pools (indoors or out) well equipped gyms, recreation rooms and playgrounds are considered standard features by many. Hot tubs, saunas, roof decks, wine cellars, and concierge services are amenities with a definite lean toward luxury. Regardless of personal opinion on what is standard versus what's fancy, the first place to look for definition of an amenity is the association bylaws but you may not find one. “But don’t be surprised if you do not find a defined 'Building Amenities' description in the bylaws,” says Todd M. Ross, the managing director at One Point Brokerage, LLC in New York City. “Amenity space is really common space put to specific use for the benefit of the owners and residents of the building, and the term common space or common limited space is defined in the bylaws or proprietary lease. In today’s development terminology, amenities are meant to denote a special use of common space such as a pool, spa, wine room, movie room, or gym; it is more marketing terminology than insurance terminology,” he explains.

New and Improved Amenities

According to Karyl Dicker Foray, CIRMS, CRIS for Chicago-based insurer Rosenthal Brothers, Inc.,  liability policies can include coverage for various items such as a  slip-and-fall exposure, products liability (if someone should become ill as a  result of eating tainted food at an association sponsored event, for example),  host-liquor liability and medical payments to guests of the association and its  unit owners.  

 “A condominium association provides insurance for the outside walls of  habitational buildings, plus common areas (such as grass and walkways)  surrounding the buildings,” she says. “Coverage should also be included for a clubhouse, gazebo, pool, storage areas,  parking facilities, tennis courts and any other areas owned by the association.”  

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