- This amended Section 12 of the Illinois Condominium Property Act includes new types or more specific limits of insurance for condominium associations for coverage obtained by associations for limited and common elements. These changes apply only to policies issued or renewed after June 1, 2015.
- This type of coverage is often called “Ordinance and Law” coverage. It includes the increased cost of rebuilding property in the event that the original design in need of replacement is not up to current code requirements. Ordinance and Law coverage is often a separate line of coverage or additional endorsement on a property policy
- Associations should check with their insurance professional when renewing policies after June 1, 2015.
- The prior language of the Act included general reference to Ordinance and Law coverage, but the new text specifies exact amounts necessary.
Boards of Directors should also have additional coverage for three types of claims. Boards shall also obtain additional coverage for actions against the board in their official capacity that includes:
i. Insurance for defense of non-monetary actions
ii. Defense of breach of contract actions
iii. Defense of actions related to sufficiency of insurance actions
These are general claims against boards that often were not insured-against losses before, but now must be part of a board’s minimum coverage required by the Act. This new coverage must also cover all prior, current, and future board members while acting in their official capacities. It will be important to discuss compliance with your insurance professional for any policy renewed after June 1, 2015 or issued after June 1, 2015.