Written by Avi Singh, Insurance Broker
Earlier today a hot water pipe burst in a condominium building partially flooding parts of the building and requiring a partial evacuation of the building. That the building is residential is immaterial to this post. A condominium is series of individual units which comprise a structure. Each unit owner holds title to the individual unit and has a fractional interest in the common areas of the building as a whole.
A common misconception is that unit owners are insured through the condominium corporation. They are not. The common elements and the building are insured through the Condominium Corp., but the contents within the units as well as the potential expenses that arise with a forced evacuation are not. Whether an individual is a business owner in a commercial condominium or a resident within a residential condominium, the occupant of the unit must secure their own coverage in order to address an issue such as the forced evacuation that occurred today.
Had this been in a commercial condominium, and had the appropriate coverage been purchased the occupants would be indemnified appropriately, whether it be for their loss of income or extra expenses required to keep their business in operation.
I am sure that the members of the Condominium board are scouring their policy at present. An astute board will ensure that their insurance broker conducts a rigourous review of their policy annually to ensure that they are managing the risks of the Condominium appropriately and in the most cost effective manner for their members.
Today it was a residential condominium building, tomorrow’s pipe burst may be in a commercial one, either way it is the building owner’s business. Protect your business, discuss your options with your broker.