The insurance of the syndicate does not cover every possible risk as it contains exclusions and deductibles. To mitigate the risks, it is possible to subscribe complementary riders to the insurance policy. Their purpose is to extend – for higher insurance premiums – the insurance coverage and the limit of the indemnities, such as:
Insurance for professional fees
This rider can be extremely useful if the syndicate has to pay the fees and disbursements of the professionals in the case of a loss (such as a: lawyer, notary, architect, engineer or land surveyor). These professionals are often retained to advise the Board of Directors and, as needed, prepare reports, plans and specifications and insure the surveillance of the work to ensure the restoration of your immovable.
Insurance for the fees of the trustee
In the case of a substantial loss, the management of the indemnities paid out by the insurer can become a very complex endeavor. The appointment of a trustee will therefore be required, but its fees and other expenses can add up.
Insurance of unpaid common expenses (condo fees)
If the building suffers a major loss, the co-owners may be tempted to stop paying their condo fees for legitimate reasons. This is possible if, for example, they do not have the full enjoyment of the common or private portions and services. Your syndicate could then end up in financial difficulties. Some insurance companies offer coverage that provides for the payment of the condo fees during the restoration.
Equipment breakdown insurance (breakdown of machines)
This coverage is intended to compensate for the lack of coverage of some insurance policies for the risks associated with the breakdown of mechanical, electrical, heating, air conditioning or refrigeration equipment, a boiler or a pressure vessel. It is usually the object of a separate warranty. It is in the best interest of your syndicate to include in its insurance coverage this type of risk, because the financial consequences can be significant, in the event of damage caused to the immovable’s machinery by an electric arc, electrical failure, explosion due to pressure and centrifugal force.
WHAT YOU SHOULD KNOW! Some declarations of co-ownership impose subscribing complementary insurance. In any event, it is good management practice to do so.
WHAT TO KEEP IN MIND: The purpose of complementary insurance is to have better insurance coverage.
WARNING! Every insurance contract includes limitations and exclusions. Your damage insurance agent is required to explain them and offer, if needed, complementary and optional coverage in accordance with your needs.
CONSULT THE PUBLICATION: Condo Insurance: Everything you should know at pages 52 and following.