1. Module 2: Role of Insurance in Risk Management

2. Role of Insurance in Risk Management
Focus:
Implement risk management techniques in the risk management process.

3. Role of Insurance in Risk Management
Module Objectives
Identify important aspects of an association’s fact sheet
Identify important request for proposal terms
Identify and describe the various types of insurance coverage typically found in community association programs.
Identify bid specifications for a insurance proposal
Identify and define claim process terms.
Identify perils of an incorrect claim process.

4. Role of Insurance in Risk Management
The next step is to implement the risk management techniques selected by the board.
This transfer of risk financing begins with the development of an insurance request for proposal, including an association fact sheet and bid specifications.

5. Lesson 1: RFP Terms and Fact Sheets

6. RFP Terms and Fact Sheets
Lesson Objective
Identify important aspects of an association’s fact sheet.
Identify important request for proposal terms.

7. RFP Terms and Fact Sheets
Activity #1: Discuss Insurance Terminology use in a RFP
Purpose: To become familiar with the terms and concepts found in an insurance request for proposal for a community association.

8. Uses for an Association Fact Sheet
Helps manager identify and evaluate exposures to possible loss—a risk management control.
Demonstrates management’s ability to manage to the board, the agent, and the carrier.
Provides an inventory of the association’s real and personal property that can be used for other purposes.

9. RFP Terms and Fact Sheets
Activity #2: Association Fact Sheet
Purpose: To become familiar with the purpose and content of an association fact sheet for insurance coverage.

10. Lesson 2: Insurance Coverage and Bid Specifications

11. Insurance Coverage and Bid Specifications
Lesson Objectives
Identify and describe the various types of insurance coverage typically found in community association programs.
Identify bid specifications for a insurance proposal.

12. Insurance Coverage and Bid Specifications
Common Insurance Coverages for Community Associations
Property Coverages
Liability Coverages
Net Income Coverages
Personnel Coverages

13. Workers’ Compensation/ Employers’ Liability Insurance
Does an association with no payroll need workers’ compensation insurance?
How is employers’ liability different from statutory workers’ compensation?
How is employers’ liability different than employment practices liability?

14. Insurance Coverage and Bid Specifications
Four Basic Questions to Ask About Insurance Coverage
What or who is covered?
For what events are they covered?
For how much are they covered?
Are there any qualifications to coverage?

15. Insurance Coverage and Bid Specifications
Sample Partial Bid Specifications
Commercial Package Policy
Continue Fidelity
Commercial General Liability (CGL)
Directors’ and Officers Liability (D&O)
Umbrella Liability

16. Insurance Coverage and Bid Specifications
Activity #3: What to include in a Bid Specification for Insurance
Purpose:
To become familiar with the most common provisions that appears in bid specifications for community association insurance.
To call attention to special provisions and issues this could be problematic for an association.

17. Bid Specifications
Property Insurance

18. Bid Specifications
Fidelity Insurance

19. Bid Specifications
Commercial General Liability (CGL) Insurance

20. Bid Specifications
Directors and Officers (D&O) Insurance

21. Bid Specifications
Umbrella Liability Insurance

22. Insurance Coverage and Bid Specifications
Monitoring a Community's Insurance Program
Insurance is a contract.
People are expected to be familiar with the contracts that they enter into.
This holds for insurance.

23. Insurance Coverage and Bid Specifications
Insurance contract should be reviewed:
When the association first obtains a policy.
When a change is made in the policy coverage during a term. When a policy is renewed.
When a loss occurs.

24. Insurance Coverage and Bid Specifications
Parts of an Insurance Policy
Declaration Page
Forms
Endorsements
Optional Coverages
Common Policy Conditions
Glossaries

25. Insurance Coverage and Bid Specifications
Insurance Folder
Assemble the insurance policies in the folder using the declaration pages as your guide
Use the declarations page as a “table of contents” to locate the separate forms included in a policy

26. Insurance Coverage and Bid Specifications
Think of an insurance policy as a reference document.
You don’t sit down and read it cover to cover as you would a book.
But you must be able to locate information in it—with or without your insurance agent’s help.

27. Insurance Coverage and Bid Specifications
Activity #4: Organize an Insurance Folder
Purpose: Small groups organize an insurance folder and locate major coverage provisions in an insurance policy

28. Lesson 3: Claims

29. Claims Objectives Identify and define claim process terms.
Identify perils of an incorrect claim process.

30. Claims How does your association insure: On-Your-Own Association
Side-By-Side Association
Above-And-Below Association

31. Claims Does your list include all four types of exposure to loss?
Property
Net Income
Liability
Personnel

32. Claims Steps to Take When You Find Out About Any Potential Loss
Protect life and property from further damage.
Keep detailed and accurate records.
Always tell the truth.
Avoid saying anything that suggests the association or management is responsible for what happened.

33. Claims Restrict records to a description of facts.
There are pros and cons to keeping records.
Their benefit is that they help recall and support your version of a situation.
They are a disadvantage if you have done something wrong—or failed to do what you should have done.

34. Claims How to Decide Whether to Report a Loss: Property Loss
Employee Injury
Liability Loss

35. Claims
Liability loss
An injured party’s prior condition is immaterial to the association’s liability for bodily injury—even though it may lead to greater injury and therefore greater liability.
If an allegedly injured party makes a claim against the association’s liability insurance directly to the insurance agent, the agent must report the claim to the carrier.

36. Claims How much to confer with agent: Agent represents the carrier
May have to act on information you divulge
Vary in how they respond to privilege information
Know your agent
Explore issues in the abstract

37. Claims
Self Insurance
If an association decides not to report an actual loss, it is deciding to retain financing of the loss—or to self-insure it.
Risk retention essentially is self-insurance.

38. Claims
Sample Claims Report
Fact Section
Public Adjuster

39. Claims First Party/Third Party Coverage
When the association makes a claim under its own policy, it is a first-party claimant.
When the association makes a claim against another party’s liability insurance, it is a third-party claimant.

40. Claims Identify exposures to loss Analyze
Review alternative risk management techniques
Assist board to select
Implement
Monitor and improve risk management program.

41. Module Summary
Focus:
Implement Risk Management techniques in the Risk Management Process

42. Module Summary Module Objectives
Identify important aspects of an association’s fact sheet
Identify important request for proposal terms
Identify and describe the various types of insurance coverage typically found in community association programs.
Identify bid specifications for a insurance proposal
Identify and define claim process terms.
Identify perils of an incorrect claim process.

43. Discussion Questions
What are some important aspects of an association’s fact sheet and bid specifications?
Describe a time when you were involved in a claim process. What went well? What could have been improved upon?
Name and explain the differing types of insurance coverage for community associations.
Are there any types of coverage you believe your association needs? What can you do to start the process?
What are some potential perils of an incorrect claim process?
What is the most challenging aspect of risk management?
Describe a situation you are struggling with and ask the members of your class for advice.

44. Course Evaluation Please be sure to fill out your course evaluations.
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45. Course Exam 50 questions Multiple choice
Results will be mailed within 4-6 weeks, if not sooner
Good luck!

46. Contact CAI 225 Reinekers Lane, Suite 300 Alexandria, VA 22314
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47. Thank You! For participating in this course
For your support of CAI and the Professional Management Development Program