Budget Box: Property and Casualty Insurance

By Karl Stephens - karls@landings.org
General Manager/COO

One of the most important responsibilities for The Landings Association is ensuring we have proper policies and coverages in place should an accident to property or an asset occur.

Such peace of mind is not cheap, though. While the past three years the average annual cost for property and casualty insurance has been $724,963, this year was projected to be particularly challenging due to inflation and “hardening” insurance marketplace conditions. The Property and Casualty Insurance Program is budgeted annually in The Landings Association’s Operating Fund.

How does the Association determine appropriate types of coverages, amounts, and deductibles? In April 2021, the Association had a property appraisal completed on all Association-owned buildings to ensure our insurance is based on accurate valuations. Those figures were updated in January 2024 to reflect the additional impact of current inflation. We also have a dedicated Insurance Committee composed of insurance professionals who work with staff and our brokers. 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 all 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.

For reference, here are the various types of coverages for the Association: 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.

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 Insurance in 2024 is estimated to be $807,839. This renewal reflects an 11% increase over the 2023-2024 premium and a $52,618 projected increase over the 2024 Insurance Budget.


This article was originally published by The Landings Association on their website.

Visit landings.org to read the original article.