For any co-op or condo in New York, there are certain types of insurance that they cannot live without. Generally those include: property, liability, umbrella, D&O (with employment practices liability (EPL) insurance embedded in the coverage), fidelity, equipment breakdown coverage or more commonly called boiler and machinery (B&M), workers compensation, disability coverage, and when applicable, environmental coverage.
“If you have the basic 8 or 9 (environmental only if you have the exposure) coverages, then there is no redundancy. It is always a balance of having proper coverage with the broadest terms and conditions at the most efficient cost for the coverages you need,” says Todd Ross, president of Manhattan-based TM Ross Insurance Brokerage, LLC. “With insurance you only know what you have purchased after a loss, and the worst time to find out what you have and don’t with insurance coverage is after the loss.”
Ed Mackoul, president of Mackoul & Associates, Inc., which has offices in New York City, Long Island, New Jersey and Florida, believes that New Yorkers need to pay particular attention to having enough of equipment breakdown insurance or B&M, which will cover all the machinery in the building in case of a mechanical breakdown.
New York State of Mind
“There are differences between New York and Iowa because we are a much more litigious state,” Mackoul says. “Directors & Officers liability becomes more important here because statistics show that 70 percent of all D&O claims are lodged in five states (New York, New Jersey, Texas, California and Florida).”
Outside of major cities, not everyone is thinking about terrorism, but that’s an insurance issue that co-ops and condos in New York need to think about. “A lot of these buildings will have to pay extra for terrorism coverage and rates tend to be higher here than other states, where it’s not on everyone’s mind,” Mackoul says. “Before 9/11 no one thought about it, but then insurance companies started excluding it but now they can either include it or charge extra for it.”