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MINIMUM LEVELS OF INSURANCE
 QUESTION: Under section
1365.9 regarding the minimum limit of liability for associations with more than
100 units. When it speaks of $3,000,000 does this mean the association must maintain
$3,000,000 per occurrence or can a policy affording $2,000,000 per occurrence
with $4,000,000 aggregate annual limit meet the limit referred in the code?
ANSWER: Policies with an aggregate limit of $4 million
but a $2 million single
occurrence limit do NOT satisfy the statute. Because of the language
found in
Civil Code 1365.9(b), "Any cause of
action in tort" associations wishing to limit owner liability must maintain
the prescribed limit “per occurrence” and not rely on an annual aggregate.
As a result, boards should maintain the
required amounts on a “per occurrence” basis
with at least (i) $2 million for associations with 100 or fewer units
and (ii) at least $3 million for associations with more than 100 separate interests.
(Note: These are minimums; associations may wish to maintain higher limits.)
Special thanks to
Timothy Cline,
President of the Timothy Cline Insurance Agency, Inc.
for the above information. Mr. Cline specializes in providing insurance to
community associations.
HEALTH STUDIOS. Last year,
Health and Safety Code
'104113
 was passed into law which requires health studios throughout the state to
acquire and maintain
automatic external
defibrillators. There has been a great deal
of concern that this applies to gyms maintained by homeowners associations
because health studies were broadly defined to include facilities that
maintained body building equipment.
On February 1, 2007, the
Legislative Counsel of California issued an opinion that fitness facilities
operated by common interest developments do NOT fall under this statute and are
not required to maintain defibrillators.
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Sincerely
yours,
Adrian
J. Adams, Esq.
ADAMS & KESSLER LLP |
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