Budget Box: Property and Casualty Insurance

One of The Landings Association’s most important responsibilities is ensuring we have appropriate insurance policies and coverages. These range from property, to liability, to crime. 

One recent example of how having proper insurance coverage in place is the failure of the Public Works facility generator. Working closely with our insurance broker, we successfully navigated the claims process, resulting in the replacement of the generator at minimal expense. 

Such peace of mind is not, cheap. For the past four years, the average annual cost for property and casualty insurance has been $582,231. This expense is budgeted annually in The Landings Association’s Operating Fund.

How does the Association determine appropriate types of coverages, amounts, and deductibles? We have a dedicated Insurance Committee composed of seasoned insurance professionals who work closely with staff and our broker. Each year, this committee reviews changes in the insurance products, new policy options, the impact on premiums from taking higher or lower deductibles, changes in values in insured properties, and other variables. This is balanced against the risk of self-insuring (or taking higher deductibles) vs. the Association’s ability to cover potential losses. In other words, having the right insurance policies in place protects the community from unexpected, and unbudgeted, expenses.

Once the Insurance Committee finalizes and votes on its recommended coverages for the next year, the Association’s Finance Committee and Board of Directors do the same. The total cost for the next 12 months (starting April 1, when most policies renew) is $653,201.

For reference, the various types of coverages for the Association include the following: commercial property, commercial general liability, commercial inland marine, commercial auto, umbrella, commercial crime/fiduciary liability, directors and officers, employee practices liability, boiler and machinery, storage tank liability, fire, flood, cyber liability, liquor liability, drones, and workers compensation.