The Board That Didn't Know What It Didn't Know
A 95-unit condominium in a mid-size city had a property management company handling day-to-day operations. The management agreement required the property manager to "maintain copies of certificates of insurance from all contractors and vendors." The management company did exactly that - it kept a filing system with COIs from every vendor.
At an annual board meeting, a board member who happened to be a commercial insurance broker asked a simple question: "Can I see the COI from the elevator maintenance company?" She reviewed it for three minutes, then asked: "Does your elevator maintenance contract require the vendor to name the association as additional insured?" It did. The COI in the file showed no additional insured language. The elevator company had been servicing the building for four years. Their COI had been on file the entire time. No one had ever checked whether it satisfied the contract requirements.
A subsequent audit revealed that 11 of 19 active vendor COIs were deficient in at least one material respect. The property management company had a collection program. It did not have a compliance program.
Why COI Compliance Matters Specifically for Condominiums
Condominium associations sit in an unusual legal position: they are simultaneously property owners, quasi-governmental bodies (with rule-making authority over owners), and the entity responsible for maintaining shared infrastructure. This creates layered liability that makes contractor and vendor insurance particularly important.
Property owner liability. The association is responsible for the safety of common areas - lobbies, hallways, parking structures, pools, fitness centers, and building systems. When a contractor or vendor causes injury or damage in those spaces, the association is typically named as a defendant alongside the contractor.
Board member exposure. In some states, board members can face personal liability for decisions that result in losses to the association - including decisions to hire uninsured vendors or to fail to enforce insurance requirements. Directors and officers coverage protects board members but does not eliminate the exposure.
Master policy impact. When contractor incidents result in claims against the association's master policy, every unit owner shares the cost through increased assessments or deductibles. A pattern of uninsured contractor incidents can make the community uninsurable at standard rates.
Where COI Requirements Come From in Condominiums
Unlike franchise agreements, which are bilateral contracts with clear insurance provisions, condominium COI requirements arise from multiple sources - and not all property managers know where to look.
Master deed / declaration. The master deed establishes the legal foundation of the condominium and may include provisions about contractor insurance, particularly for work affecting common elements or the building envelope. Requirements in the master deed cannot be overridden by board resolutions.
Bylaws. Condominium bylaws govern association operations and may include specific insurance requirements for contractors and vendors engaged by the association.
House rules and regulations. Many associations adopt rules and regulations (sometimes called "Rules" or "Community Standards") that specify insurance requirements for vendors and for unit owner contractors. These are adopted by the board and can be updated more readily than the master deed or bylaws.
Vendor and contractor agreements. The association's contracts with its vendors and contractors should include explicit insurance requirements. When the contract specifies requirements, the COI must be verified against the contract - not just against a generic checklist.
State law. Some states impose minimum insurance requirements on associations or contractors working in residential buildings. Property managers should be familiar with applicable state law requirements.
The Unit Owner Contractor vs. Association Vendor Distinction
One of the most important and often-neglected distinctions in condo COI compliance is the difference between:
Association vendors - contractors hired directly by the association to work on common elements, building systems, or association-owned amenities. The association is the client. The association controls the contract terms, including insurance requirements.
Unit owner contractors - contractors hired by individual unit owners to perform work within their units (kitchen renovations, bathroom upgrades, flooring replacement). The association is not the client, but the work occurs within the building and can affect common elements.
Each category requires a different compliance approach:
| Category | Who Hires | Who Sets Requirements | Where Requirements Live | Enforcement |
|---|---|---|---|---|
| Association vendor | Association/Board | Board, via contract | Vendor agreement | Direct - association refuses access or payment |
| Unit owner contractor | Unit owner | Board, via house rules | House rules/regulations | Indirect - association requires COI before work begins |
Unit owner contractors are a frequent compliance gap. A unit owner hires a plumber to replace fixtures. The plumber comes in, does the work, leaves. The association never collected a COI. If the plumber causes a water leak that damages common elements or adjacent units, the association has a problem - and a gap in its compliance record.
Best practice: require unit owners to submit contractor COIs to the management office before any work begins in their unit. Include this requirement in the house rules and enforce it consistently.
Building a Condo COI Compliance Program
An effective condominium COI compliance program has five elements:
1. Requirements inventory. Document the insurance requirements from every source - master deed, bylaws, house rules, and individual vendor agreements. Identify the highest requirement applicable to each vendor category. Resolve any conflicts between sources (in most cases, the more specific requirement controls).
2. Vendor list maintenance. Maintain a current list of all active association vendors, their service categories, and the insurance requirements applicable to each. Update the list when vendors are added or removed.
3. Pre-engagement COI collection and verification. Every vendor must submit a current COI before starting work. The COI must be verified against the applicable requirements - not just filed.
4. Renewal calendar management. Every COI has an expiration date. The compliance program must track those dates and initiate collection and re-verification 60 days before expiration. Gaps in coverage between policy periods are themselves compliance failures.
5. Documentation for board records. The compliance record - who was verified, when, against what requirements, with what result - should be summarized in board meeting materials at least annually. This documentation demonstrates that the board has exercised its oversight responsibility.
The Property Manager's Role in COI Compliance
Property managers at condominium associations often operate without a clear understanding of where their collection obligation ends and where compliance verification begins. The management agreement matters: if it says "collect and file COIs," the manager may fulfill that obligation while leaving the compliance gap entirely open.
Boards should review management agreements to understand what insurance oversight they are actually purchasing. "Collecting" COIs is not "verifying" them. If the management agreement does not include verification against contract requirements, that work either falls to the board directly or requires a separate platform.
Bramble fills this gap for property managers and HOA boards. It reads vendor agreements and house rules to extract insurance requirements, compares submitted COIs field by field against those requirements, and provides property managers and boards with a compliance record that covers both collection and verification.
See how Bramble builds condo COI compliance programs for property managers.