The Marcus Hour | Ep. 22 | 3.7.25 | Beyond the Typical Policy: A Deep Dive into Risk & Protection for Community Associations

We’re excited to announce the next Marcus Hour, hosted by Stephen Marcus and Jake Marcus, with Special Guests Kevin Davis and Erik Davis of Kevin Davis Insurance Company!

In this session, we’ll explore the different types of claims that community association board members face today and minimizing risk as it relates to not only general insurance protection, but also what policies may be able to protect boards/managers against breach of fiduciary duty, discrimination, breach of contract, and other claims, including:

• Employment Practices Liability (EPL) Policy
• Directors & Officers (D&O) Policy

In this session, we will be using real-world examples to highlight potential risks and prevention strategies. This educational panel conversation is designed to equip board members and managers with key insights on mitigating risk and protecting their associations.

WEBVTT

1
00:00:00.220 –> 00:00:01.280
Jake Marcus: We’re gonna like.

2
00:00:02.330 –> 00:00:11.390
Jake Marcus: wait for people to file in. It usually takes a little bit for them to populate. So let’s give it a a few minutes, or maybe a minute, less than a minute.

3
00:00:12.022 –> 00:00:14.770
Jake Marcus: We’ll get the show on the road.

4
00:00:15.090 –> 00:00:16.930
Sherry Branson: Okay. Sounds good.

5
00:00:17.770 –> 00:00:21.190
Jake Marcus: Some exciting attendees coming in for this riveting.

6
00:00:21.840 –> 00:00:23.210
Stephen Marcus: Hey! How’s my hair? Look!

7
00:00:25.042 –> 00:00:26.340
Jake Marcus: Do you get fantastic?

8
00:00:30.060 –> 00:00:30.700
Stephen Marcus: Okay.

9
00:00:34.090 –> 00:00:42.010
Jake Marcus: Okay, it looks like we got. We got plenty of participants attendees. So let’s let’s get the show on the road and sherry. You want to kick it off.

10
00:00:42.010 –> 00:00:43.350
Sherry Branson: Sure, great

11
00:00:43.750 –> 00:01:08.709
Sherry Branson: welcome, everybody. I’m Sherry Branson, marketing manager for Kevin Davis insurance and welcome to the Marcus hour episode number 22, and our speakers today need no introduction. We have not one, but 2 father-son duos. We have Steven and Jake, Marcus of Alcock and Marcus of Braintree, Massachusetts, and Kevin Davis and Eric Davis of Kevin Davis

12
00:01:08.710 –> 00:01:15.120
Sherry Branson: Insurance. Today we have a great topic for you all. It’s beyond the typical policy.

13
00:01:15.120 –> 00:01:22.110
Sherry Branson: a deep dive into risk and protection for community associations. I’m now joined by Jake, Marcus. Hi, Jake!

14
00:01:22.390 –> 00:01:23.380
Jake Marcus: Hey? Sherry.

15
00:01:23.560 –> 00:01:24.500
Sherry Branson: How are you?

16
00:01:24.690 –> 00:01:26.000
Jake Marcus: Good! Good! How are you?

17
00:01:26.000 –> 00:01:38.560
Sherry Branson: Doing well. We have a great topic today, Jake. We have great speakers. We’re going to talk about legal and insurance aspects regarding community associations, the claims that you’re seeing, etc. So take it away.

18
00:01:38.930 –> 00:02:07.679
Jake Marcus: All right, absolutely. Yeah. Thank you. Sherry sherry is the marketing manager for Kevin Davis. Insurance has been there for 19 years, and we want to give a special shout out to Kevin Davis Insurance Company or insurance services because it is their 25th year anniversary. So congratulations to Kevin and his team. Sherry, Eric, all you have done a fantastic job, and we are proud to be a small part of all you have achieved in your 25 years. Thanks, guys.

19
00:02:07.980 –> 00:02:08.589
Erik Davis: Yeah, thank, you.

20
00:02:08.590 –> 00:02:19.020
Stephen Marcus: And and Kevin Davis insurance services is in La. So I know that you all

21
00:02:19.180 –> 00:02:31.600
Stephen Marcus: fared fairly well with the devastating fires in La, but we certainly want to send out our thoughts and prayers to all the people who were affected.

22
00:02:32.967 –> 00:02:37.460
Stephen Marcus: it’s just all all tragic, but.

23
00:02:37.460 –> 00:02:53.939
Kevin Davis: We. We both had some scary times that in like a 3 day, in a 24 h period, it went from Eric’s neighborhood to my neighborhood, and we both looking out and and had some sleepless nights there. But, we’re all okay, and we didn’t have to evacuate everything, but it was tough. It was tough times, so thanks.

24
00:02:54.730 –> 00:03:22.239
Jake Marcus: Absolutely. And and I think that is a obviously Kevin Davis insurance services is based in California, Los Angeles, California, and a lot of what we’re going to discuss today is how insurance the different types of specific insurance. But one of the things we’ll touch on, I think, is that insurance can be a very nationwide approach. What happens in in one jurisdiction, you may say. Oh, that shouldn’t affect us!

25
00:03:22.240 –> 00:03:28.060
Jake Marcus: Where in Massachusetts, Kevin and his team and Eric and his team are in California.

26
00:03:28.060 –> 00:03:47.140
Jake Marcus: Things that happen in either. Jurisdiction shouldn’t affect you, but that’s a misconception and a lot of what we’ve seen. I practice in Florida as well, and we see a lot of a lot of events there. That kind of can cause a trickle effect to the insurance market. So we’ll definitely get to that.

27
00:03:47.140 –> 00:04:01.249
Jake Marcus: But without further ado, I do want to get into what we’re actually going to talk today, because we do have a lot to cover, just as a housekeeping item. If you do have any questions, feel free to put them in the chat.

28
00:04:01.250 –> 00:04:29.070
Jake Marcus: feel free to send those out. We will be sure if we don’t address them during the 1 h today we will be sure to send out a follow up that has answers as best we can address them. But yeah, we’re going to get into Kevin Davis insurance services travelers. Kevin is also the managing general agent for travelers, and we’re going to kind of get into the specialty insurance coverage that their team offers.

29
00:04:29.090 –> 00:04:46.754
Jake Marcus: and and that includes the condominium and community associations that they cover and ensure and and we were talking before we we think it’s around 40,000 community associations. But that may have may have Rose in in the even just during this webinar. So

30
00:04:48.260 –> 00:04:50.420
Jake Marcus: we can only hope right? Exactly.

31
00:04:50.420 –> 00:04:52.450
Jake Marcus: Yeah, exactly. Hopefully. We have some time.

32
00:04:52.782 –> 00:05:07.739
Stephen Marcus: As Bernie used to tell me, when, if a client would ask if if they if our potential customer would ask him if they could get a policy, he said. Like, you’re just in luck. We just happen to have one policy left

33
00:05:10.220 –> 00:05:30.500
Stephen Marcus: so soon. Soon. Next year 40,000 will be millions and millions like Mcdonald’s. But yeah, more importantly, is, they have a they have a superb form of coverage for community associations. And Jake, do you want me to quickly get into the Why

34
00:05:30.780 –> 00:05:33.209
Stephen Marcus: on directors and office insurance.

35
00:05:33.210 –> 00:05:43.009
Jake Marcus: Yeah. Yeah. And and I think, just as another one more broad kind of touch point before we get into the more specifics of the program. We’re gonna get very deep into it today.

36
00:05:43.455 –> 00:05:55.709
Jake Marcus: Is, yeah, we’re going to be covering the types of insurance that you should have outside of general liability insurance. This will include directors and officers, crime, umbrella errors, and omissions

37
00:05:55.710 –> 00:06:18.560
Jake Marcus: which which Kevin and Eric will be able to address in more detail than you’ll probably want to know, but it’ll be important to know and important to be appraised of. It will also get into the different types of claims. This could include breach of fiduciary duty, discrimination, defamation, breach of contract, and many more. But we’ll get into all of that.

38
00:06:18.560 –> 00:06:26.920
Jake Marcus: and without further ado I will push it over to Steven and partner with our firm, or of counsel actually.

39
00:06:28.063 –> 00:06:30.923
Stephen Marcus: Low man on the totem pole.

40
00:06:31.400 –> 00:06:34.320
Jake Marcus: I know I’m so well, so, so Steven and Kevin.

41
00:06:34.320 –> 00:06:38.410
Stephen Marcus: I’m not even sure I can say that anymore. But whatever the expression is, these days.

42
00:06:38.410 –> 00:06:53.480
Jake Marcus: Yeah. Well, you’re good to go. So we’ll we’ll get into beyond the typical policy, a deep dive into risk and protection for community associations. Steven. He he is on the insurance task force in New England. Has taken a approach in his

43
00:06:53.680 –> 00:06:58.680
Jake Marcus: the later stages of his career, as I’ll put it, to really focus on insurance and

44
00:06:59.150 –> 00:07:07.469
Jake Marcus: community associations. He’s still. He’s still a young cat, but he’s he’s getting. He’s getting more seasoned. So we’re we’re giving him more specifics to focus on now.

45
00:07:07.580 –> 00:07:09.519
Jake Marcus: So Stephen, without further ado.

46
00:07:10.680 –> 00:07:12.620
Stephen Marcus: Okay. Next slide, Jake.

47
00:07:12.860 –> 00:07:34.160
Stephen Marcus: Well, the 1st slide. So I’m gonna briefly I know none of you who know me will believe that I really will be brief. But I’m gonna try to be on why associations should have directors and offices liability insurance. So the 1st concern is, so you get on the board.

48
00:07:34.360 –> 00:07:37.070
Stephen Marcus: Be a great way to get to know your neighbors.

49
00:07:38.633 –> 00:07:45.400
Stephen Marcus: and it’ll look good on your resumes, and none of that’s

50
00:07:45.480 –> 00:08:08.469
Stephen Marcus: that’s really true, and then you get into it. And if you have a 500 unit condominium and or a hundred unit condominium, and each unit is worth 500,000 if I can do the math. Is that 50 million dollars? But today you’re running a multimillion dollar business.

51
00:08:08.490 –> 00:08:20.309
Stephen Marcus: and you’re also the condominium business, and you’re also operating a multi-million dollar piece of real estate.

52
00:08:20.440 –> 00:08:39.630
Stephen Marcus: So the 1st thing that you find out is, well, gee! As board members, since we don’t get paid. Typically almost all unit owner board members are volunteers is well, I can’t get sued personally, can I?

53
00:08:39.760 –> 00:08:48.999
Stephen Marcus: And unfortunately, and it’s probably something to say about the legal profession. But in almost

54
00:08:49.160 –> 00:08:51.309
Stephen Marcus: every lawsuit that we see.

55
00:08:51.510 –> 00:09:00.489
Stephen Marcus: especially ones where there’s anger on the part of the unit owner who’s upset with whatever the they don’t like, that the Board’s doing

56
00:09:00.830 –> 00:09:12.989
Stephen Marcus: that. The that if a lawsuit is filed after a claim, it almost always will. Be against the Association

57
00:09:13.280 –> 00:09:17.499
Stephen Marcus: and against each board member

58
00:09:17.840 –> 00:09:34.470
Stephen Marcus: personally and in Massachusetts. Anyway, we’ve had one case like 40 years ago, that got close to finding personal liability. And then on appeal, they took that away. So typically personal liability

59
00:09:34.950 –> 00:09:56.049
Stephen Marcus: isn’t. You’re not going to find liability, but it’s very common that you’re going to get personally sued. And we, we typically would move to dismiss that that kind of say that the the claim is really against the association. But the real real reason that you want to have directors and offices liability insurance and have a

60
00:09:56.400 –> 00:10:16.240
Stephen Marcus: good policy which is broader in coverage, is that the Condominium documents almost always say that the boards members, that the owners will indemnify the Board, that the Association will indemnify the board if we mess up. Don’t worry about it.

61
00:10:16.240 –> 00:10:32.300
Stephen Marcus: The whole community will chip in to make sure that that you don’t have any monetary impact on yourself personally, as a board member

62
00:10:33.027 –> 00:11:00.929
Stephen Marcus: now, we like to say just on indemnification clauses would prefer to see that they say, defend and indemnify the board, because I think indemnification technically is probably paying after the there’s a judgment, whereas defense starts on day one, and legal defense, and even of claims that aren’t strong claims

63
00:11:00.930 –> 00:11:05.250
Stephen Marcus: and indemnification is the payment of those things. So

64
00:11:05.390 –> 00:11:17.679
Stephen Marcus: the need for dno is that if you have a 3 million dollar suit and there’s a judgment against you. The dno is needed

65
00:11:17.730 –> 00:11:25.090
Stephen Marcus: to have the funds to defend and identify the board, so that each unit owner

66
00:11:25.090 –> 00:11:53.249
Stephen Marcus: isn’t assessed for its share of the 3 million dollars judgment, for example, so dno is a type of malpractice policy that protects board members and associations against claims that the Board didn’t do its job, and it doesn’t matter if the claim is not correct. The Board still needs the insurance for the defense, even on questionable claims.

67
00:11:53.280 –> 00:11:59.540
Stephen Marcus: And people do get upset. They send in demand letters.

68
00:11:59.540 –> 00:12:25.629
Stephen Marcus: and they want the the board to open up the pool. Why’d you close the pool? Well to the beginning of the pandemic? And it was for everybody’s safety. Well, I don’t care. I bought here wanting a swimming pool, and you didn’t. You didn’t give it to me. You should have done whatever it took to to make sure the pool was open. You breach your fiduciary duty

69
00:12:28.000 –> 00:12:29.080
Stephen Marcus: So

70
00:12:29.240 –> 00:12:58.509
Stephen Marcus: that’s why you need the dno coverage, and then the question becomes, how much insurance should you have for dno, and even for your umbrella coverage? And my mentor was Bernie Gitlam, who sadly passed away a couple of years ago, and his question when I said, Well, gee! It’s an association. Get a million or 5 million or 10 million. It was right after the Caesar’s palace fire, which

71
00:12:58.570 –> 00:13:27.199
Stephen Marcus: dates both at least myself and and Bernie at the time, goes way way back. But there were claims for millions, and and Bernie said, the answer is, how much can you afford that? There’s no real number in terms of how much insurance you should get? Basically, it’s a question of how much can you get sued for? Maybe Kevin and Eric can talk about that a little bit, but I want to turn it over to them

72
00:13:27.655 –> 00:13:42.690
Stephen Marcus: to to go into what the differences between different D and O policies. For example, there are policies that are part of a a package policy that an insurer gives.

73
00:13:43.161 –> 00:14:07.670
Stephen Marcus: But then there are standalone or mono line policies that are specific and have enhanced coverage for the condominiums and community associations, and I want to turn it over to Kevin and Eric to go over those issues and what you should be looking for in a policy, Kevin or Eric.

74
00:14:07.940 –> 00:14:20.380
Erik Davis: No, I’m gonna take this one, actually. But I wanna thank you guys both for having us on. You know, definitely, a great relationship with your you know your firm, and it’s an honor to be part of your Marcus hour. So thank you for having us on as your guest.

75
00:14:22.190 –> 00:14:22.555
Erik Davis: Yeah.

76
00:14:23.130 –> 00:14:36.920
Erik Davis: So somewhere that you know exactly to echo what Steve was talking about, you know not all Deano policies for community solutions are created equal. There are a lot of different options out there, but we’re going to talk about 3 specific ones. The 1st is going to be.

77
00:14:37.110 –> 00:14:51.699
Erik Davis: and I’m going to rank them actually from least valuable to most valuable when it comes to addressing coverage. The 1st type is going to be the kind of one that Steve just mentioned your standard package. Do you know policy? This is not a standalone policy. It usually covers your basic. Do you know insurance needs

78
00:14:51.760 –> 00:15:10.670
Erik Davis: and doesn’t cover any of the items usually listed at below on this slide, which are extremely important for associations. This policy is normally the quickest and least expensive option, though, because it’s usually added to a much larger insurance policy. This is the policy you want. If you just want to check up a box that shows you have. Do you know, coverage? That’s essentially what this is doing.

79
00:15:11.580 –> 00:15:18.289
Erik Davis: The next one I want to talk about is your private slash, nonprofit deno policy. This is the standalone policy much better.

80
00:15:19.220 –> 00:15:35.350
Erik Davis: It covers much of the D and O. Exposure that an organization might face, however right that right there in lies the issue. This policy designed for a multitude of entities. It’s not necessarily for associations. Specifically, they cover charitable organizations. They do museums, they do cultural centers.

81
00:15:35.500 –> 00:15:40.040
Erik Davis: It’s they’re not specifically designed for associations. So they’re still missing some of the key

82
00:15:40.140 –> 00:16:01.440
Erik Davis: issues that associations need to be have covered, for example, like insured versus insured breach of contract. They don’t cover property managers, usually. And in most situations you need to buy separate employment practice, liability policy. So it’s not something that would be covered under the d like it wouldn’t be something that’s packaged with the dno. The way this next one I’m going to speak about is.

83
00:16:01.720 –> 00:16:03.399
Erik Davis: and that is your

84
00:16:03.840 –> 00:16:29.479
Erik Davis: specific hoa condo d, and O. Policy, this is the gold standard for your D, and O. When it comes to covering your association, it’s a standalone policy that’s truly designed to understand the fundamental differences that associations have from other entities. This is the type of policy when you have a good one that should cover all the items below, and more, and they should have everything from great great claims handling to attorneys like the amazing ones we have on this panel that

85
00:16:29.480 –> 00:16:50.729
Erik Davis: only do hoa condo business because you don’t want, you know, adjusters that are doing Gl claims that are doing, you know, wind and hail type stuff. And you don’t want attorneys that are doing ipos, but also trying to litigate. And and you know, do hoa condo business. They don’t match up. So when you get a really great policy

86
00:16:51.830 –> 00:16:59.710
Erik Davis: with those things. With that policy also comes the experience and knowledge that you’re working with the very best

87
00:16:59.970 –> 00:17:01.980
Erik Davis: people in the industry.

88
00:17:02.300 –> 00:17:12.230
Erik Davis: So this is the type of policy you want when you’re looking to truly have your association covered. So those are definitely the 3 types that are out there, and you know

89
00:17:12.990 –> 00:17:19.510
Erik Davis: you can rank them where you want to. But the last one is definitely where you want to have. If you’re looking to have your association covered.

90
00:17:20.630 –> 00:17:44.169
Kevin Davis: Yeah. And I must say one jump in there, Eric, is that. And and, Steve, you said it last last night. How much can you afford, and that’s what we’re talking about. Here is affordability. The easiest thing to do is to spend a couple of $100, get in the package or a couple of $100 more to get a standalone policy that doesn’t pick up. When you talk about the difference between A. D. And O. Policy for Community Association, any other dno policy. There are 3 things we’re gonna talk about.

91
00:17:44.370 –> 00:18:01.260
Kevin Davis: Number one. Look at the insuring agreement in A. D and O. For insuring agreement for a Community association. We will say it pays loss because of a claim. Number one was a claim for a wrongful act number 2, made against the insured simple as that

92
00:18:01.600 –> 00:18:14.819
Kevin Davis: claim for wrong fact against the insured. That is, you have a community association, D, and O. Policy. If you have a package policy, they will say, legally obligated to pay because they suit for damages

93
00:18:14.970 –> 00:18:17.859
Kevin Davis: from a wrongful act against the insured.

94
00:18:18.040 –> 00:18:33.169
Kevin Davis: So right off the bat there, you’re talking about 2 specific things. You want A. D. And O. Policy picks up claims versus A. D. And O. Policy that picks up suit for damages because we’re going to talk later is that the majority of the claims that we see

95
00:18:33.370 –> 00:18:36.259
Kevin Davis: are not suit for damages. They are claims.

96
00:18:36.660 –> 00:19:00.860
Kevin Davis: So number one, you’ve got to look at insuring agreement and make sure it is a claim for wrongful act against the insured. Now, once you get that, you go to Step Number 2, and you got to figure out what those 3 things mean, claim wrongful act, and insured. So when you talk about what is a claim, it is a written demand for monetary or non-monetary relief.

97
00:19:00.960 –> 00:19:28.290
Kevin Davis: So if I live in a Condominium Association and I park in visitors parking I park there all the time. But the board is hassling me on it. I can make a demand that says, listen, I demand you stop and refund all the fines you paid back. That’s a monetary demand. It’s a written demand for monetary damages. Written demand for non-monetary damage is the same thing. I don’t want anybody. I just want you to stop harassing me.

98
00:19:28.370 –> 00:19:31.399
Kevin Davis: So a written demand is a claim

99
00:19:31.790 –> 00:19:40.470
Kevin Davis: also a civil proceeding, so a suit for damages is a claim. So now we got 2 is a claim. The 3rd one is criminal proceedings.

100
00:19:40.590 –> 00:19:45.120
Kevin Davis: Now it’s interesting. We talk about criminal proceedings. Is that how is that possible?

101
00:19:45.520 –> 00:19:56.410
Kevin Davis: 40 years ago and we talked about things that a long time ago is we had a lawsuit in New York City, where the board was found criminally negligent because they did not install the window guards properly.

102
00:19:56.590 –> 00:20:09.490
Kevin Davis: So, criminal complaints, formal administrative proceedings, fair Housing Act claims. So it’s right off the bat. There’s a difference between a suit for damages and a claim. A claim is 4 parts to it.

103
00:20:09.850 –> 00:20:20.460
Kevin Davis: monetary, non-monetary civil proceedings, criminal complaints, and administrative proceedings, that right there is a huge difference, because we live in a condo world.

104
00:20:20.930 –> 00:20:23.119
Kevin Davis: Your plane’s gonna come in

105
00:20:23.730 –> 00:20:33.209
Kevin Davis: all those areas. So you need more than super damages. So you got a claim is everything. I mean, we’re not missing anything, you know. Number 2.

106
00:20:33.400 –> 00:20:50.830
Kevin Davis: What is a wrongful act now? It’s interesting. If you look at a Dnl. Policy, they have a paragraph 5, 6. Different words, 5 different sentences about a wrongful act. It says, any act, error, mission, misstatements, misleading statement goes on, but the 1st 2 words are any act.

107
00:20:51.300 –> 00:21:06.760
Kevin Davis: That’s it. You don’t need anything else after you say, Eddie, act, Eddie, act, that’s all. But they spell out what act means like that. So you got a what does it claim? Written? Demand all that stuff? And the dno is a wrongful act. Policy. And it says 2 words, 1, st 2 words, Eddie, act any act

108
00:21:06.960 –> 00:21:13.459
Kevin Davis: so now who’s an insured in the policy? Well, your current board of directors is a an insured.

109
00:21:13.700 –> 00:21:16.570
Kevin Davis: and your past board members are also insured, but

110
00:21:16.930 –> 00:21:21.470
Kevin Davis: everybody else is insured. Who’s acting at the direction of the Board?

111
00:21:21.630 –> 00:21:37.159
Kevin Davis: That means your committee members, your volunteers, your employees, the spouse of employees spouse of the spouse of the board of directors. So anybody acting at the direction of the Board, it’s pretty much covered on your DNA policy as long as

112
00:21:37.320 –> 00:21:57.389
Kevin Davis: they act in that capacity, so it has to be acting in a capacity as a committee member or a board member, because in Condo world you can have 2 board. You could have a board member not liking a next door neighbor. And we see these things because those wind chimes that blow at 3 o’clock in the morning.

113
00:21:57.390 –> 00:22:07.730
Kevin Davis: and a board member will come out and remove it, and he says, act in his capacity as a board member. No, he’s just annoying. He’s an annoying next door neighbor. So it’s about capacity.

114
00:22:08.190 –> 00:22:32.259
Kevin Davis: Okay? And it’s about acting direction of the board. If you’re not a board, member. So if you look at a D and O contract, okay, we’re looking at something that is incredibly broad. It is covering again the claim, which is, you know, just a written demand. Just here you go. You’re acting up. I don’t like what you’re doing. You breach your future duty. You are insured because you’re everybody, and it’s a wrongful act as any act.

115
00:22:33.350 –> 00:22:38.500
Kevin Davis: That is the problem, because now everything’s covered in there. So the most important thing is

116
00:22:38.650 –> 00:22:51.559
Kevin Davis: what’s excluded under the D and O. Policy. And we talk about exclusions, exclusions comes into 4 areas. Okay, every exclusion. When A. D and those 4 areas you got to be concerned about number one.

117
00:22:51.840 –> 00:23:00.260
Kevin Davis: It’s limit coverage for uninsurable items, certain things you can’t insure for like war and nuclear and a whole list of things you can’t. Terrorism. Those kind of things

118
00:23:00.980 –> 00:23:12.650
Kevin Davis: eliminate coverage that provided elsewhere, like bodily injury and property damage, pollution coverage. It’s coverages that not designed for the dnos design you picked over someplace, else you do it there.

119
00:23:13.010 –> 00:23:35.920
Kevin Davis: Now, the 3rd one is interesting, and that is coverage due to conduct or behavior, meaning that I am not entitled, you know, we as board members and go out to, and I have a celebrate our party, and or guess what we’ll start paying ourselves because we’ve been doing this for 20 years, we’re gonna pay ourselves so things that legally entitled to do. And there’s exclusions for that, too. However.

120
00:23:36.220 –> 00:23:41.840
Kevin Davis: the most important part about that is that we don’t decide. If you did something wrong or not.

121
00:23:41.950 –> 00:23:45.130
Kevin Davis: the judge decides. So you get defense costs until you determine it.

122
00:23:45.240 –> 00:24:06.130
Kevin Davis: because against the law to discriminate. So I can’t say that Jake and Steve discriminated. All I can say is that, hey? Let the judge determine discrimination, and then there could be coverage. You know we don’t. You can’t provide coverage breach of contract because they enter into a contract. And just I’m not going to pay it anymore. You know, that’s not, you know, it’s against public policy. So what you can do is provide defense

123
00:24:06.420 –> 00:24:12.219
Kevin Davis: for these kind of coverages. So we’re looking at dno coverages, it makes sense for the exclusions to be there.

124
00:24:12.740 –> 00:24:14.789
Kevin Davis: So here’s the most important part. Is that

125
00:24:15.650 –> 00:24:23.419
Kevin Davis: to make coverage cheap. So we go back to Eric’s 1st example. That’s in the packages. We have a holistic solutions.

126
00:24:23.710 –> 00:24:51.429
Kevin Davis: then to for the next coverage is the one, the private nonprofit. We exclude things because the reality is this, you can get a sheet. You can get a policy, A. D and O. Policy for a couple $100, or you can get a policy for a couple $1,000 that provides the protection that the Board needs and what we I’ve been doing for probably about 40 years now is providing one type of coverage that is designed for community associations.

127
00:24:51.430 –> 00:25:10.190
Kevin Davis: And it’s based on the fact that we look at community associations and we get the lawsuits coming in and say, Oh, wow! The Dn policy supposed to cover that. And we make decisions. Say yes or no. If it’s yes, we cover it, we say, no, we will put an exclusion in the future to make sure that things are not covered.

128
00:25:10.260 –> 00:25:37.860
Kevin Davis: So right now we’re continuing to look at either this new generation of claims that we’re seeing and saying, Wait a minute. What do you want to do here in terms of Post Covid world? Now we’re seeing a lot of post Covid World type claims, because guess what’s happened. At 2 o’clock in the afternoon, at one o’clock in the afternoon, Jake, you’re sitting at home and Steve sitting at home, and we’re trying to have this conversation, and a guy playing pickleball outside, or he’s smoking underneath your window, and he’s doing these things that wasn’t done before.

129
00:25:37.860 –> 00:25:50.030
Kevin Davis: And so we’re looking at those kind of things and say, Okay, how do we handle those or legislative issues that’s happening in Florida right now, you know, or reserve studies that have to be taken care of. How do we handle things? And it is cyber

130
00:25:50.090 –> 00:26:12.359
Kevin Davis: right now, based on the definitions that we’re saying. There’s no cyber exclusion in there. So we get a claim in from Illinois saying that, wait a minute. My personal data has been let out there, and you’re not allowed. The biometric data is against law to share it and to store it in Illinois. So all of a sudden you get to cover a claim on your D. And O. Policy for that it should be a cyber claim we’re looking at going. Wait a minute.

131
00:26:12.480 –> 00:26:27.409
Kevin Davis: This coverage is a lot broader. So in the 25 years we’ve been doing it, all we’ve been doing is looking at the claims year in and year out, and trying to determine. Wait a minute, either A, we need more money. B. We need higher deductibles, or we need less coverage.

132
00:26:27.580 –> 00:26:56.429
Kevin Davis: and we’ve been fortunate because what we’ve been doing is just growing with the marketplace. So, as Covid goes, we have to increase our premium. The premium is still way too low for dno, for $2,000, for a million dollars in coverage. It is not a lot of money, and historically, our claims that used to be 1020, $30,000 are now 60, $7,000. You know. I’ve seen more than 1 million dollar claims in the past year. Year.

133
00:26:56.620 –> 00:27:12.809
Kevin Davis: Yeah, that I’ve ever seen. And I I got one in this morning, you know, just a million dollars playing. So yes, right now, dno is really critical, and it’s really important. But you gotta have a dno that makes sense. So

134
00:27:14.670 –> 00:27:17.863
Kevin Davis: okay, I guess I’ve done that part.

135
00:27:18.530 –> 00:27:23.089
Kevin Davis: All right. Let’s go to the next slide to Jake. Let’s just have some fun and talk about the claims itself.

136
00:27:23.970 –> 00:27:25.629
Kevin Davis: Alright, Eric, why don’t you jump in on these.

137
00:27:25.920 –> 00:27:30.449
Erik Davis: Oh, yeah, sure. So I just want to talk about, you know, just a couple to start

138
00:27:31.390 –> 00:27:38.779
Erik Davis: ones that are really important to have in your policy, or what claims that actually happened. So you need to make sure that they’re covered under your policy.

139
00:27:40.000 –> 00:27:58.630
Erik Davis: Let’s let’s just get started. So the 1st is going to be your reach of fiduciary duty, you know. Obviously, that’s the biggest part of this pie. That’s what makes you know that’s what dno is truly, for every D and O. Policy you should encounter should have this type of coverage. But you know, the next ones I want to talk about are going to be ones that are not always covered. But they’re just as important.

140
00:27:58.770 –> 00:28:00.110
Erik Davis: you know, as

141
00:28:00.750 –> 00:28:28.180
Erik Davis: Jake and Steve had mentioned. Discrimination claims something that happens all the time. This is something that every association and I mean every association, is going to see. At some point in their existence. They may not file a claim. They may not do anything with it, but it’s definitely going to be something they’re going to see. At some point in their existence. Somebody is going to eventually buy into an association that wants to do something that they’re not allowed to do, or there’ll be somebody who is physically cannot do something, or cannot use the facilities to

142
00:28:28.330 –> 00:28:45.199
Erik Davis: the the fullest extent that they should. And that’s what leads to these type of issues, you know. That’s where you’re. I would like to have a dog. I can not allowed to have a dog. You’re discriminating against me because I need X, and you’ll see in the next slide. We’re getting into some claims examples. So I don’t want to give away. You know what we’re going to be talking about.

143
00:28:45.200 –> 00:29:00.550
Erik Davis: But those are the type of issues you see, or, for example, if you are disabled and in a wheelchair and there’s a pool. But there’s no wheelchair lift to get you into the pool. I cannot enjoy the pool the same way everybody else does. You’re discriminating against me, therefore I’m going to sue you.

144
00:29:00.750 –> 00:29:29.790
Erik Davis: you know. So those are the type of issues that come, and you need to make sure your D and O. Policy has that these next 2 are extremely important because they’re ones that are. I mean, they’re not. They’re important because they’re ones that are usually not covered by other D and O policies. Even the nonprofit D and O policy is the insured versus insured. And we spoke about how you know Steve talked about how most of our all, you know, condo boards are volunteer, based. So usually, what happens is that

145
00:29:30.740 –> 00:29:35.989
Erik Davis: you know the reason why this is important is because most organizations don’t have boards that change

146
00:29:36.560 –> 00:30:00.620
Erik Davis: like I said, ours in our space are always frequently rotating because they’re volunteers, and there’ll be times as we spoke about before, where the new board doesn’t agree with the situations that the old Board has made, and therefore they will sue the old Board for decisions that they made that they didn’t agree with, and in reality I’m 9 times out of 10 that new board would have made the same decision those old board would have made

147
00:30:00.720 –> 00:30:16.430
Erik Davis: at that time. But because they’re the new board. They’re like, Oh, you know what that was. Them that was their problem we’re going to like. Don’t don’t yell at us for doing that. That was their issue. We can sue them for doing, for for making those, you know, decisions that they made that we didn’t agree with.

148
00:30:16.900 –> 00:30:39.419
Erik Davis: and the other one that we just spoke about was the breach of contract. This is something that is extremely important. Obviously, that’s not an indemnity type situation. It’s more of a it’s more of a defense. You don’t want to pay. No insurance policy is going to pay for, you know you I don’t pay my vendor, so the insurance policy will pay for them. But, as you know, tons of vendors are all doing work on the premises for insured, you know, or

149
00:30:39.790 –> 00:30:59.149
Erik Davis: tons of vendors are on the premises of associations regularly, which means they enter into a variety of contracts, and, as you know, as anybody on you know, this call has dealt with contractors. Sometimes they don’t appreciate the work that has been done. Maybe they think that the work isn’t completely finished, but the contractor saying that it is done. That’s where these type of issues can. Really.

150
00:30:59.490 –> 00:31:10.820
Erik Davis: you know, that’s where you really need to have, like, you know, make sure the breach of contract is something that is covered for a defense at the Association. So that that’s kind of the ones that I wanted to get into, because those are the ones that I feel like are

151
00:31:11.940 –> 00:31:14.830
Erik Davis: very important for condo specific

152
00:31:15.250 –> 00:31:24.890
Erik Davis: issues and the ones that are usually not covered under other policies, and can really show you that if you don’t have those, you’re severely missing out.

153
00:31:25.710 –> 00:31:31.879
Kevin Davis: Let me let me let me add a couple more in there like. 1st of all, you understand that you look at that list there.

154
00:31:31.960 –> 00:31:57.839
Kevin Davis: The bulk of those lists are non monetary damage type claims. So when you have violation of the Ccnrs, which conditions the violation of the rules, most of those things are, and these are the ones I hate more than everything in the world. These kind of situation I hate because there’s rules, and you have people in there who either a don’t like to obey the rules, or, what’s worse, these are people who go out and say the Board’s not enforcing the rules properly.

155
00:31:58.010 –> 00:32:26.620
Kevin Davis: My favorite ones is a trash. Can the people like trash cans out? They’ve been out for 48 h. It’s been 3 days now, and 4 days now. And, boy, you’re not doing anything about it. So there’s these rules out there that people adjustment or guess what the budget you haven’t sent the budget in a timely manner, and I’m going to. And then they like to just file a claim. You know. They file a claim because the board in their mind. The board is incompetent, or the board is dishonest, and so we’re starting to see a lot of claims there

156
00:32:26.880 –> 00:32:55.890
Kevin Davis: again. I like to call them post Covid claims, because Post Covid claims means we’re together more, and we just don’t like each other. And because we don’t like each other. And oh, and Steve said earlier the angry. So we have a bunch of angry people out there, and they’re looking at rules and saying, Either a you’re not abiding by the rules or B, you’re not following the rules, the Board, and that means I want to have a claim made against you. So if you look at a lot of these claims on here. They’re not covered because they are non monetary damage claim.

157
00:32:56.050 –> 00:33:00.170
Kevin Davis: So if you have a policy that says suit for damages.

158
00:33:00.280 –> 00:33:27.379
Kevin Davis: Guess what? You don’t have suit for damages. You have angry unit owners who say to the Board members, guess what you know. You towed my car away. You say I can’t have a pet, you know, whatever it is, they breach their fiduciary duty because they are incompetent, you know. Defamation and harassment was not even on a list 5 years ago. It has reached up to up there. That is because, guess what?

159
00:33:27.450 –> 00:33:44.749
Kevin Davis: Everybody can be harassed. Only certain groups of people could be discriminated against. You got race, free, color, religion, and everything. But guess what? Everybody can be bullied and harassed, and so, if everybody can be bullied and harassed. Guess what happens? Boom! That thing shot right up there. I didn’t have a category for that 4 or 5 years ago.

160
00:33:46.540 –> 00:34:16.249
Kevin Davis: Breach of contract is there because we have a lot of angry people who said, guess what? The landscaper did not trim the trees. What didn’t show up that day missed in front of my parking spot, and instead of them calling Landscaper up and saying, Come back out here with that what the board says. Oh, you added again, you you’re a nuisance, and we have a lot of nuisance claims. So people out there who just nuisance and guess what the Board refused something about these people who are nuisance. And now there’s a d and O claim.

161
00:34:16.330 –> 00:34:27.310
Kevin Davis: just because you’re a nuisance doesn’t mean you can’t do. They’re not. They’re not right? Yeah. And that’s what creates this kind of problem. So when we talk about these claims.

162
00:34:27.420 –> 00:34:44.089
Kevin Davis: a lot of them are not covered in your standard D and O policy! So you have to make sure that you have a policy. These are all the claims that we receive. These are all the kind of things that we paid defense costs on not some settlements, but most of the defense costs

163
00:34:44.775 –> 00:35:07.680
Kevin Davis: epli. Employment practice is probably the only right. I mean, I could say, we’ve got their damages on Epli. I don’t see many damage on breach of judiciary duty. You breach of judiciary duty because you didn’t do what you didn’t pass the assessments. You didn’t have. Your assessments are too high. You didn’t. You have a reserve study, but you didn’t take care of reserve study. These are the things that we see daily.

164
00:35:07.960 –> 00:35:14.820
Kevin Davis: I’m challenging the old board because the old board had a reserve study and ignored it. Now we have special assessment.

165
00:35:15.040 –> 00:35:21.740
Kevin Davis: These things used to be $1015,000 claims now, and they are 60, 70, $80,000 claims.

166
00:35:22.360 –> 00:35:32.680
Kevin Davis: This is the problem in the dno. And this problem that we have to deal with on a on a daily basis to figure out, how do we keep a policy like this together?

167
00:35:33.258 –> 00:35:44.001
Kevin Davis: And make it available, not only just today for the future. Now Eric’s more concerned about than I am just like Steve, you know. They pushed me aside like Steven to have special projects to do.

168
00:35:46.770 –> 00:35:49.549
Kevin Davis: So that’s us right now. Okay, let’s go to some sample claims.

169
00:35:50.620 –> 00:35:52.479
Kevin Davis: Alright, guys, you guys can jump in.

170
00:35:54.620 –> 00:35:56.240
Stephen Marcus: You’re biting it out there, Steve.

171
00:35:56.240 –> 00:35:59.619
Stephen Marcus: Yeah, let me start with the emotional support animals.

172
00:36:01.130 –> 00:36:09.860
Stephen Marcus: Says I. I’m not sure how many claims you’re saying, but we see a lot

173
00:36:11.340 –> 00:36:13.279
Stephen Marcus: as a backdrop to this.

174
00:36:13.800 –> 00:36:25.240
Stephen Marcus: The people who have pets, and Jake and I are both both pet owners with

175
00:36:26.341 –> 00:36:53.070
Stephen Marcus: Jake’s dog. Digby. Marcus even has a Facebook page, and one year in our town of Easton was voted as one of the 50 most powerful people in Eastern but he’s an 18 pound pug. So it was unusual, and he had to try hard to make make that list. But

176
00:36:53.150 –> 00:36:57.430
Stephen Marcus: so you have an you have a pet. You bring the pet in

177
00:36:58.590 –> 00:37:10.421
Stephen Marcus: the board the pet has a the board has a the documents have a no pet restriction they send you letters you ignore them

178
00:37:11.301 –> 00:37:31.459
Stephen Marcus: you then get to the to the point where the association says, well, now, we’re gonna have our attorneys chase you because you have to get rid of the pet. You’ve ignored all our letters. You haven’t come up with any reason as to what? Why you have it.

179
00:37:31.590 –> 00:37:40.060
Stephen Marcus: And at that point, inevitably the unit owner goes to an attorney who says, Aha!

180
00:37:41.272 –> 00:37:48.720
Stephen Marcus: I’m wondering, if this is really an emotional support animal. Now keep in mind.

181
00:37:49.710 –> 00:37:56.190
Stephen Marcus: We are very aware that most people who have emotional support animals

182
00:37:56.350 –> 00:37:58.209
Stephen Marcus: truly have the need for them.

183
00:37:58.840 –> 00:38:08.160
Stephen Marcus: So the cases that upset our boards and upset our associations are the ones where

184
00:38:08.640 –> 00:38:12.640
Stephen Marcus: we think somebody might be gaming the system

185
00:38:12.830 –> 00:38:19.589
Stephen Marcus: that that well, gee! We had a year and a half of letters and fines and everything else.

186
00:38:19.640 –> 00:38:49.109
Stephen Marcus: and nobody said anything about emotional support animals. Then the attorney sends a letter, and the next thing we get is some therapist in Missouri. Not that there’s anything wrong with Missouri, though you should note that they did lose the super bowl in Kansas City this year to the Eagles, and you’re looking at us.

187
00:38:49.420 –> 00:39:04.030
Stephen Marcus: What is this? And there have been emotional support, animal mills that have come up where in 20 min I applied for one, and probably because I need emotional support. But within an hour

188
00:39:04.480 –> 00:39:25.740
Stephen Marcus: I had a certification back from a licensed social worker that I needed an emotional support. Animal. You can’t really ask about what the disability is. So there’s a narrow focus, and people are saying, Well, gee, maybe there’s some

189
00:39:25.740 –> 00:39:38.939
Stephen Marcus: some cases where the Missouri therapist really and truly talked to. This. This person treated them as a patient and came out with that determination. But

190
00:39:39.030 –> 00:39:40.990
Stephen Marcus: yeah, it

191
00:39:42.040 –> 00:40:01.449
Stephen Marcus: gets boards upset that there are these mills out there that may be coming up with some cases where there really was no investigation as to whether the person had a disability, and then everybody goes to war, and these are

192
00:40:01.450 –> 00:40:17.950
Stephen Marcus: difficult cases for associations they often lose if they fight them. But we we see a a lot, and that’s just a very, very common claim. I don’t know how often you’re seeing.

193
00:40:17.950 –> 00:40:19.400
Kevin Davis: Let me add something to it.

194
00:40:19.660 –> 00:40:20.010
Stephen Marcus: Okay.

195
00:40:20.010 –> 00:40:30.679
Kevin Davis: What creates a problem for us in these you have emotional support animals that don’t become a problem until they become a problem meaning that we had a emotional support squirrel.

196
00:40:30.970 –> 00:40:43.309
Kevin Davis: So the squirrel was okay until he became aggressive. So so also, you see, a lawsuit where the squirrel was overly aggressive. They had overly aggressive squirrel that end up being emotional support, animal.

197
00:40:43.450 –> 00:40:52.130
Kevin Davis: or we had our famous pot Belly Pig, where the board of directors said that it’s not a support animal. It was lunch so.

198
00:40:53.700 –> 00:41:18.390
Kevin Davis: and those are kind of things that we see is that or like, right now you have again, we have this post Covid world. We have a you have a motion sport animal that becomes a problem because he people went back to work and the dog is barking. So we are seeing these claims come out where they are. Okay. These pets are okay until something happens. And again, it’s 2 o’clock in the afternoon here.

199
00:41:18.390 –> 00:41:28.489
Kevin Davis: and we’re trying to do a webinar, and I’m somebody here, the dog barking across because guess what? The owners at work now where he was home for 3 years, and I had to go back and work.

200
00:41:28.490 –> 00:41:34.330
Kevin Davis: So now, all of a sudden, I we complain about it, and now the Board has to do something about it. And that’s what creates

201
00:41:34.330 –> 00:41:55.860
Kevin Davis: the problems in there. And so they have to go out and find the person from Missouri emotional support animal. And that’s what we see. The bigger problem is right now is that people complaining that the the animal they have is something’s wrong with them. And then, and all of a sudden they have to go and do these issues. So yes, we see these a lot. See them a lot. Yeah.

202
00:41:57.918 –> 00:42:05.000
Stephen Marcus: Okay, and and keep in mind as well. That discrimination claims our defense.

203
00:42:05.510 –> 00:42:10.279
Stephen Marcus: The defense is provided, not the indemnification, not the judgment.

204
00:42:10.540 –> 00:42:24.169
Stephen Marcus: So boards the legal expenses are a big part of the these claims, and that’s huge that the defense has provided. But the boards has to be

205
00:42:24.310 –> 00:42:44.919
Stephen Marcus: aware that it’s against public policy to provide insurance for the discrimination for the actual judgment. So be careful that you know where there’s coverage and where it where it may may end. And again.

206
00:42:44.920 –> 00:42:55.880
Stephen Marcus: also make sure, whether you have one of the good policies or one of the package policies that may not be as good, and there are a few

207
00:42:55.880 –> 00:43:19.299
Stephen Marcus: 2 carriers that have decent good d, and O policies as part of their packages. But more often than not the $200 policy is not that great? And I guess the way to look at it is in a hundred unit condominium 200 units versus 2,000 units.

208
00:43:19.310 –> 00:43:22.400
Stephen Marcus: Yeah, it’s an $1,800 difference.

209
00:43:22.480 –> 00:43:31.079
Stephen Marcus: But as attorneys, we don’t look at that we look at. Well, gee! They’re suing you for half 1 million dollars.

210
00:43:31.300 –> 00:43:34.339
Stephen Marcus: If we don’t zealously defend the claim.

211
00:43:34.630 –> 00:43:43.819
Stephen Marcus: it’s the concern about how are you? Gonna go to the unit owners and say, we have a $500,000 judgment

212
00:43:44.310 –> 00:44:06.220
Stephen Marcus: that the owners have to pay, and that’s where you want the protection of the the D. And O. Policy is for the judgment, and the premiums, as Kevin said, are probably pretty low for what they for what they cover. But anyway, keep that.

213
00:44:06.220 –> 00:44:20.489
Kevin Davis: Yeah, let me let me add something. Let me add something that that is really important about the judgment. If there’s a judgment, what happens is. And Eric mentioned earlier. If you have, like our claims, people specialize in community associations.

214
00:44:20.795 –> 00:44:21.100
Kevin Davis: So

215
00:44:21.100 –> 00:44:30.719
Kevin Davis: so when the claim comes in, they will do a job. Okay, they will do that job and say, guess what? There’s discrimination happening right now.

216
00:44:30.830 –> 00:44:44.910
Kevin Davis: we need to settle this case. Okay. But in settling we’ll do is go back to the insured and say, Listen, you actually discriminated you did a you did a job. So we’re going to settle, and we’re going to say that you have to pay a part of that loss.

217
00:44:45.100 –> 00:44:56.750
Kevin Davis: Okay, we’re going to sell it. We’ll get it settled. But you’re going to participate in loss, or they’re going to say, guess what? This is. One of those situations where you know what we’re seeing, the preponderance of the evidence discrimination.

218
00:44:56.840 –> 00:45:23.859
Kevin Davis: But we’re going to settle it. Now. A good thing is in our best interest to settle it. So what we do is make sure that we have the attorneys that understand community associations, and that we may need to settle this right now, because the association is, it can get worse, and we’ll settle it. But we will charge the Community Association back. We will, we will make sure the Community Association has to, you know, pay that $100,000 or so. So it’s

219
00:45:23.860 –> 00:45:31.430
Kevin Davis: it’s it’s he can get complicated. But you gotta make sure you you work well with your attorneys handling it. And the carrier.

220
00:45:31.430 –> 00:45:42.940
Kevin Davis: you know. If it’s Carrie you don’t understand, attorney, you understand? You may end up having to pay a couple $100,000 out of your pocket as opposed to work with somebody to say, we will take care of it. That makes sense.

221
00:45:43.930 –> 00:45:44.940
Jake Marcus: And I, and I’ve.

222
00:45:44.940 –> 00:45:59.530
Stephen Marcus: And it’s important to know that there there are exclusions to these policies. So there are cases where you are, gonna be insurance doesn’t necessarily

223
00:45:59.650 –> 00:46:23.414
Stephen Marcus: cover anything that ever happens. So you have to know what what is covered, what’s not covered. This is not your $2,000 doesn’t give you a blank check to just do anything crazy because you hate some of the neighbors, maybe with good reason. But but

224
00:46:23.910 –> 00:46:46.650
Stephen Marcus: you have to give some thought to all policies have insurance. Whether it’s for I have exclusions, whether it’s for mold, whether it’s for terrorism, war, etc, not everything’s going to be covered, but by and large. The kind of claims that we see come in are generally things that

225
00:46:47.179 –> 00:46:56.370
Stephen Marcus: do have some some coverage providers. You want to go into other claims, or Eric, do you wanna or Jake.

226
00:46:56.370 –> 00:47:00.340
Kevin Davis: You know. I tell you one that. Oh, Jake, go ahead! You can go and jump in.

227
00:47:00.340 –> 00:47:19.620
Jake Marcus: No, that’s okay. So before I get into that, just the point that Steven mentioned ties into what Eric was getting at earlier with the most common exclusions can be an uninsurable item. So, for example, a lot of these have to do with a lot of the examples we have on this page have to do with the board

228
00:47:19.929 –> 00:47:33.220
Jake Marcus: affecting the value of someone’s asset. Their unit. And what the first, st the second one, you see, after the emotional support is fails to fund reserves, and unit owner brings a claim that his or her unit decreases a hundred 1,000.

229
00:47:33.240 –> 00:47:33.760
Stephen Marcus: Yes.

230
00:47:33.760 –> 00:47:49.770
Jake Marcus: You’ll see it come across as a breach of fiduciary duty claim, because saying the Board failed to adequately fund reserves, which, after the surfside collapse in Florida that has affected the reserve studies, reserve requirements across the nation.

231
00:47:49.880 –> 00:48:07.439
Jake Marcus: and what we’ll see is that an exclusion may be oh, well, you know it could be an uninsurable item that affected someone’s unit value may not be a direct kind of breach of fiduciary duty, so I think you’ll see a lot of exclusions kick in.

232
00:48:07.580 –> 00:48:33.700
Jake Marcus: But yeah, I mean, you might see something generally with these types of claims. It affects the value. And someone who is maybe angry with a unit owner angry with a board member. They may go after the board directly and try to file this claim. So just something to keep in mind as far as what the kind of intention and kind of thought processes, and I did insurance defense, general insurance defense.

233
00:48:33.700 –> 00:48:34.080
Stephen Marcus: Talking.

234
00:48:34.080 –> 00:48:48.280
Jake Marcus: The start of my career. I think you would agree, Kevin and Eric, that when you’re working on these types of claims, it’s probably better to have someone who knows condo law rather than a general insurance defense attorney.

235
00:48:49.950 –> 00:49:13.059
Kevin Davis: Yeah, definitely. And again, going to this one situation. Here we see claims and forget the value of the unit decrease. It’s just board failed to fund the reserve, and as all the funding reserves, we want to kick out the board, we want new board members. So we want a new election. So we’re seeing especially, it’s interesting. We’re seeing a lot of election disputes now.

236
00:49:13.160 –> 00:49:28.520
Kevin Davis: as a result of boards failed to fund the reserves fail to pass special assessment to have the budget right. Insurance rates are too high. So now we see a lot of election disputes as a result. So what you’re talking about here in terms of decrease the decrease by $100,000.

237
00:49:29.220 –> 00:49:48.680
Kevin Davis: We see non monetary damage. We, in fact, I don’t think I ever seen a claim like this, where they, where they actually tied a damage, amount to it that they lost money. This goes back to. We want another election. The board we have is incompetent. They failed to properly fund the reserve for another election, so that one now.

238
00:49:48.680 –> 00:49:53.740
Stephen Marcus: Are you? Are you talking on on a Federal level, or or with community associations?

239
00:49:53.740 –> 00:50:05.559
Kevin Davis: The Community Association itself. The unit owners. Yeah, the unit is upset because one unit owner upset because the board failed to fund. I want to be on the board, because if I’m president of the board, guess what, we’ll take care of all that stuff.

240
00:50:06.900 –> 00:50:30.639
Stephen Marcus: And we call them. Maybe everybody calls them coups. But yeah, there are. There are takeovers. There are angry, angry owners. Now you take Florida, where and New Jersey has done the same thing. But post surfside surfside had a maybe it was a mainly general liability claims.

241
00:50:30.640 –> 00:50:38.109
Stephen Marcus: but I think there was some dno contribution there, but it settled for 1.2 billion dollars.

242
00:50:38.340 –> 00:51:03.259
Stephen Marcus: A story for another day is that 547 million was for the Concierge Company. The Security Company, I believe, paid 547 million dollars because there was a state of the art notification system that would have notified 1st responders and all the residents, and there was a 7 min period

243
00:51:03.260 –> 00:51:27.509
Stephen Marcus: where the attorneys swimming in from across the country, representing the plaintiffs, the 98 people killed. The estates said you had 7 min. Where, if you had hit the buttons, all these people would have been notified, and some could have gotten out, and you could have saved some lies. Now the Security Person was probably paid $8 an hour, and it was at one o’clock in the morning did what I would have done. She ran out of the building.

244
00:51:27.650 –> 00:51:48.079
Stephen Marcus: and for a long time I was trying to figure out why did the Security Company pay 547 million dollars. That’s my understanding. I don’t know if you’ve heard anything else, Kevin, but based on claims like that. There are just. These claims

245
00:51:48.170 –> 00:52:02.150
Stephen Marcus: in our minds are, as Kevin said, are not just going to 70 or 80 or $100,000 claims. In some cases they’re going into the millions. And yeah, but but maybe you can

246
00:52:02.930 –> 00:52:06.009
Stephen Marcus: talk about you gonna give it another example. Kevin.

247
00:52:06.010 –> 00:52:21.409
Kevin Davis: Yeah, I want to go through that 3rd one, because we’re getting more calls about this failure to maintain insurance, because right now you have all the associations who can’t get insurance, you know, and now you have them. You get sellers, and you have the

248
00:52:21.830 –> 00:52:45.869
Kevin Davis: historically, the D. And O. Policy had what’s called a fair to maintain insurance exclusion on it. So any claim that came in about fair trade insurance exclusion it’s been excluded, and it still is a lot of policies. Some policies don’t have them anymore. So if you don’t have a fair to maintain insurance exclusion, the policy something like this, if the board is sued because they failed to maintain adequate insurance.

249
00:52:46.100 –> 00:53:04.730
Kevin Davis: It depends on what the cause of loss. If they say, as a result, the building can’t be repaired, then that’s a property damage. But they say, as a result, we have a special assessment. That’s a different story that may be covered under the D and O. Policy. So it’s a really tricky one that one is in terms of.

250
00:53:04.940 –> 00:53:14.040
Kevin Davis: Does the Board get covered when they a claim is made against that board because they did not carry enough insurance. It’s going to depend, that’s what it’s really going to depend.

251
00:53:14.040 –> 00:53:25.009
Stephen Marcus: And and the example to give to make this so that it’s not like winning the lottery is, you can’t ensure you’re building

252
00:53:25.944 –> 00:53:32.610
Stephen Marcus: for a million dollars, if it’s supposed to be insured for a hundred 1 million by

253
00:53:32.810 –> 00:53:35.220
Stephen Marcus: tons of dno insurance.

254
00:53:35.220 –> 00:53:35.510
Kevin Davis: Yeah.

255
00:53:36.522 –> 00:53:38.689
Stephen Marcus: And say, Well.

256
00:53:39.320 –> 00:53:56.600
Stephen Marcus: well, we had an 80 million dollars loss when we only had a million dollars of insurance. That’s just stupidity that you can’t just underinsure the building on purpose and think that the insurance D and O insurance covers that type of claim.

257
00:53:56.810 –> 00:54:12.449
Stephen Marcus: It’s the loss of the sale or something along those lines. Not that you don’t have to buy property insurance and Kevin’s gonna pay you everything. But but with that, said I, I think we have a couple of questions that Sherry might wanna

258
00:54:12.650 –> 00:54:14.489
Stephen Marcus: shoot to you. Kevin and Eric.

259
00:54:14.490 –> 00:54:16.770
Sherry Branson: Yes, they’re coming in

260
00:54:17.240 –> 00:54:29.280
Sherry Branson: fast and furious, which is great. Thank you, everybody for your questions, and we’ve been going over fantastic information here regarding D. And O. And claims Kevin, we have a question from Kate Rooney.

261
00:54:29.390 –> 00:54:36.150
Sherry Branson: The question is, does history of election dispute have any effect on rating or coverage? Eligibility?

262
00:54:38.750 –> 00:54:39.480
Kevin Davis: Hmm.

263
00:54:39.610 –> 00:55:03.089
Kevin Davis: Well, okay, if we see claims that had election disputes. Yes. Well, I mean, if we have prior claims, it does. It does raise the rate. However, what we’re doing, seeing trends, what we do is evaluate trends and say, Oh, here’s a trend out here, where again it follows the country. You live in a community association where we’re 50 50 country, where 10%, 20%, half people don’t like the other half.

264
00:55:03.090 –> 00:55:20.680
Kevin Davis: you’re going to have disputes. You’re going to have election disputes. And what we need to do is we’re not. We have to monitor and say, Okay, how much rate have to go up in order to cover those claims before we start putting deductibles on there. And before we start putting exclusions on there. And that’s where we’re at.

265
00:55:21.300 –> 00:55:28.269
Sherry Branson: Great. Thank you very much. And Patsy Penn, thank you so much, Patsy. She has sent in 3 questions.

266
00:55:28.550 –> 00:55:35.370
Sherry Branson: Patsy, her 1st question is so if a board fails to fully fund the reserve, what does the carrier pay on the claim?

267
00:55:35.760 –> 00:55:38.870
Sherry Branson: Should? Is it the amount that should have been reserved.

268
00:55:39.700 –> 00:55:58.189
Kevin Davis: I’m asking the lawyer the question, but I say, from my point of view, it is, we defend it, and guess what I mean. The lawyer’s job, Steve Market’s job to go in there and defend it and say the Board did the best job he can do we not? We can’t give you insurance, not there to provide you more.

269
00:55:58.550 –> 00:56:11.809
Kevin Davis: you know. In other words, we can’t give you something that you don’t really have. We can’t give you an advantage you’re not legally entitled to. So we can’t say, Here’s a Here’s, you know, money. We could defend it, and that’s about the step. What do you think, Steve.

270
00:56:13.002 –> 00:56:16.169
Stephen Marcus: Yeah, I agree. And I mean it

271
00:56:16.380 –> 00:56:28.839
Stephen Marcus: again. I mean, the the Dnl policy provides something. But if the the if the reserve should have been

272
00:56:28.950 –> 00:56:51.139
Stephen Marcus: 3 million dollars. And they’re they’re not fully funded. I don’t think D and O. Insurance was ever, or any kind of insurance was intended to ensure that loss, I think, is to back up the board in terms of the making a sound business decision knowing

273
00:56:51.140 –> 00:57:07.029
Stephen Marcus: that they could have reserves, but they could also get association loans and assessments, and but I don’t think the the insurance was ever intended to to pay the amount that the reserve should have been. Because I think

274
00:57:07.350 –> 00:57:11.380
Stephen Marcus: across the country that most associations are not

275
00:57:11.580 –> 00:57:15.120
Stephen Marcus: a hundred percent funded for reserves.

276
00:57:15.260 –> 00:57:27.450
Stephen Marcus: and everybody would be seeking these claims to get the the difference that should be should have been. And the other thing is, even

277
00:57:27.830 –> 00:57:39.020
Stephen Marcus: if it were the case, the amount of the reserves of each unit owner only would be one.

278
00:57:39.140 –> 00:57:47.700
Stephen Marcus: The unit owner should should have been contributing to those reserves, so they get a windfall if you pay them, because they should have been.

279
00:57:47.970 –> 00:57:50.250
Stephen Marcus: And if there’s a hundred units.

280
00:57:50.450 –> 00:58:03.250
Stephen Marcus: those reserves would have been funded by a hundred people, not not by the one defendant. So I agree with you that I don’t think it goes that D and O insurance, the good policies are good, but they’re not.

281
00:58:03.450 –> 00:58:08.920
Stephen Marcus: They’re not everything, everything here, any other questions, sherry.

282
00:58:08.920 –> 00:58:18.969
Sherry Branson: Oh, yeah, we have a couple more from Patsy. Thank you so much, Patsy. Patsy also would like to know, how does the D and O handle election challenges, just defense.

283
00:58:22.396 –> 00:58:31.600
Kevin Davis: Election. Yeah, I would say, I mean again the election chat, we would say, this is a legal question. I don’t see anything more, that there’s no damages. How many.

284
00:58:31.600 –> 00:58:32.749
Stephen Marcus: There’s no damages.

285
00:58:37.340 –> 00:58:49.129
Jake Marcus: The election challenges is vague. I think that would get into. There’s an election dispute as to counting percentage whatever. I guess that would be injunctive relief that would be sought.

286
00:58:49.130 –> 00:58:56.569
Stephen Marcus: But but what Kevin say in his, the person doesn’t want money.

287
00:58:56.760 –> 00:58:58.170
Kevin Davis: Yeah, they want to be.

288
00:58:58.780 –> 00:59:21.629
Stephen Marcus: King of the Condominium. They want. They want to be the board. They don’t want the other people to be the board, so I’m not sure that I’m more than happy to I’ll give you my cell number. If Patsy or anybody else wants to call me to go deeper into these questions, my number is (781) 413-5226,

289
00:59:21.970 –> 00:59:23.949
Stephen Marcus: and, as Jake said.

290
00:59:23.950 –> 00:59:25.929
Kevin Davis: Say it’s slower.

291
00:59:25.930 –> 00:59:50.267
Stephen Marcus: (181) 413-5226, and Kevin, are you? Gonna be calm. And as Jake said, Kevin, and I no longer have anything to do now that we’re being brought out to pasture. So we have plenty of time for your calls. If you want to discuss it, but but it’s a good good question. that’s the top of the hour.

292
00:59:50.760 –> 01:00:00.289
Stephen Marcus: Here’s what we promise. Everybody in attendance is is anybody who registers. You’ll get a link to the

293
01:00:01.025 –> 01:00:02.509
Stephen Marcus: to the Webinar.

294
01:00:03.520 –> 01:00:05.870
Stephen Marcus: You’ll get a copy of the Powerpoint.

295
01:00:06.190 –> 01:00:19.059
Stephen Marcus: and you’ll get questions answers to the questions that either were answered now, or the ones that we didn’t get to, and you probably should get that Monday or 2, probably Tuesday.

296
01:00:19.410 –> 01:00:36.400
Stephen Marcus: So look for that in your your email. And as I said, if you have questions, by all means call us Jake’s putting up our our email addresses email Us. And I hope that everybody got.

297
01:00:36.400 –> 01:00:45.445
Kevin Davis: Hey, Steve? There’s 1 question in there that’s kind of important, and everybody would like to probably know about that last question, Sherry, do you see that one in there about the

298
01:00:46.050 –> 01:00:50.149
Sherry Branson: The premium of the factors. The premium is based on for D, and O, that one.

299
01:00:50.150 –> 01:01:16.279
Kevin Davis: No, no, not that one they asking about should board members be able to should board members be named under the policy? Okay? That was historically, we should get a list of board members. It might have been in the in the chat more so. They they used to have a list of board members, we should get them. Now we don’t anymore. It’s really say that we, the current Board, the Past Board and future Board members. So they all are collectively. So you don’t have to name them. You have to list them, or anything like that. It is this.

300
01:01:16.560 –> 01:01:19.650
Kevin Davis: all board members, so that answer that question.

301
01:01:19.650 –> 01:01:27.809
Jake Marcus: And wouldn’t that I think there’s also. So another topic we could discuss is, should a manager or additional named and shared be included.

302
01:01:28.120 –> 01:01:35.820
Stephen Marcus: Yeah. Yeah. Why don’t you say, what what Kdis does what some similar policies do?

303
01:01:36.500 –> 01:01:55.000
Stephen Marcus: For versus, maybe what the package policies do is a property manager named is the property manager. Name for an additional premium. How does that all work with you? And the the few good dno policies that are out in the marketplace.

304
01:01:55.940 –> 01:01:57.780
Erik Davis: Hey? There, yeah, no. I think that.

305
01:01:57.780 –> 01:01:58.230
Sherry Branson: Questions.

306
01:01:58.230 –> 01:02:24.629
Erik Davis: Yeah. So for us. And the way we do it is that the property managers for so I guess you have to. You have to separate it for crime, and then cyber and dno. So under a good D and O. Policy like like ours, a property manager is already covered automatically. It’s not something you have to add. We don’t have to change the name or anything like that. So obviously, property managers will change, you know, throughout the course of a life of an association. It’s usually not the same one, for you know, 20 years.

307
01:02:24.630 –> 01:02:24.980
Stephen Marcus: Yeah.

308
01:02:24.980 –> 01:02:40.441
Erik Davis: So we can. We can usually just from the side. It’s usually just they’re guard. They’re covered under the definition of of the policy. So when you’re reading the definition of insured person under our policy, the property manager is under there.

309
01:02:40.810 –> 01:02:43.990
Stephen Marcus: And and that’s a and that’s a big deal, because the

310
01:02:44.476 –> 01:03:11.570
Stephen Marcus: the management contract, very likely is is to say that the the managers just that. They’re always gonna get named because they were in the wrong. They’re in the wrong place at the wrong time. If if they happen to be the manager, then an attorney is gonna name them in a demand along with the board. So the auto, the automatic coverage is great. I know in the past.

311
01:03:11.958 –> 01:03:20.770
Stephen Marcus: Maybe you and others would. We’re doing $75, $150 to add them. But a wonderful thing if it’s now automatic.

312
01:03:21.110 –> 01:03:27.470
Stephen Marcus: And I’m assuming you were gonna go into the crime and the designated agent. So.

313
01:03:28.160 –> 01:03:28.729
Erik Davis: Oh, yeah.

314
01:03:28.730 –> 01:03:45.960
Erik Davis: I was gonna say, yeah, just so like, yeah, on crime, you definitely have to add, you know, we at least the way our policy works is that you have to be notified like you, let us know. Hey, look! This is the property manager, and we usually add them up to the limit of what the association, you know carries for their, you know, a 1 limit which is their employee. Theft.

315
01:03:46.260 –> 01:04:00.449
Erik Davis: a cyber kind of works the same way usually have to add them via endorsement. Usually those ones cost, you know they’re not too much money, 200 $300. If that you know what I mean, but for the most part they do have to be added. But the dno is definitely automatic.

316
01:04:00.450 –> 01:04:08.670
Stephen Marcus: But my final question you’re mentioning cyber, and that’s probably I I see that as a

317
01:04:08.840 –> 01:04:15.780
Stephen Marcus: huge area of exposure that probably community associations.

318
01:04:15.970 –> 01:04:21.819
Stephen Marcus: and a lot of lots of businesses are not getting the coverage for

319
01:04:23.460 –> 01:04:28.219
Stephen Marcus: for for I don’t know if you have any statistics like

320
01:04:28.550 –> 01:04:35.280
Stephen Marcus: what percentage of I mean, even if you made a guess as what percentage of associations

321
01:04:35.450 –> 01:04:42.659
Stephen Marcus: are getting cyber coverage, because I’m not sure that everybody understands that if you don’t have it.

322
01:04:43.220 –> 01:04:47.699
Stephen Marcus: you’re not gonna have any coverage, and it’s gonna come out of pocket.

323
01:04:48.250 –> 01:04:59.439
Kevin Davis: Yeah, you know, I think, Jake, you should put this on your calendar to do a cyber seminar, because right now, the number one claim that we’re seeing across the country is social engineering. It is by far.

324
01:04:59.620 –> 01:05:14.240
Kevin Davis: and we’re seeing it more and more where the property managers are getting these bills from the landscapers or the roofers, and saying, you know, please pay now to avoid any late fees. Here’s my new bank and routing number.

325
01:05:14.440 –> 01:05:29.119
Kevin Davis: and so they send out, send money out. And all of a sudden, you know, a month later they call up, say, I haven’t got my payment this year. Yes, you did so. Oh, I didn’t tell you we were hacked. So we’re seeing that more and more and more and more and more so. Cyber policy cyber coverage is

326
01:05:29.250 –> 01:05:52.419
Kevin Davis: really important right now, not so much for the things like the data breaches. We don’t see that too much anymore, because our stuff’s all out there. But it’s just the loss of reserve account operating accounts, just the money that we’re seeing, this being from social engineering. And and you know, so you know, I would say, you know, put us in, you know, in a few months from now to do a cyber. We glad to a cyber one for you.

327
01:05:52.420 –> 01:06:13.149
Jake Marcus: That’d be great. Yeah. I remember as cyber security was becoming more of a issue, a more pressing issue it was these, the policies, including cyber insurance, were incredibly dense and and technical. So I’m I’m sure there’s a lot more that’s developed since the last time I’ve kind of had to dig in on one of those. So that’s a good suggestion. I love it.

328
01:06:13.150 –> 01:06:18.159
Stephen Marcus: And it would leave it on the the cyber of one. Get the coverage

329
01:06:18.610 –> 01:06:21.429
Stephen Marcus: and understand that that’s not covered.

330
01:06:21.620 –> 01:06:28.709
Stephen Marcus: But do what the attorneys who do loan loan closings like for people buying houses and all that.

331
01:06:31.960 –> 01:06:35.020
Stephen Marcus: put something either on your automatic reply.

332
01:06:35.490 –> 01:06:43.849
Stephen Marcus: or if you ever get if anybody. If anybody ever gets wiring instructions

333
01:06:44.577 –> 01:06:47.619
Stephen Marcus: from you have have something stating.

334
01:06:47.780 –> 01:06:54.949
Stephen Marcus: please call us to make sure that the wiring instructions are legitimate.

335
01:06:55.060 –> 01:07:09.320
Stephen Marcus: because sadly, we’re finding that. That’s how people are getting scammed is somebody’s coming in with all the information and saying versus sending a million dollars to the attorney. Here’s our new wiring instructions.

336
01:07:09.800 –> 01:07:27.048
Stephen Marcus: and then nobody sees the money anymore. So yeah, that maybe maybe Kevin. And Eric and Jake, and do this like weekly webinars. But we would love to do a cyber

337
01:07:27.480 –> 01:07:40.840
Stephen Marcus: a webinar with you a little bit down the road, and we really appreciate Eric Kevin and sherry for all you you did today, and for your preparation and all that kind of stuff

338
01:07:40.840 –> 01:07:56.570
Stephen Marcus: we. We wish you luck again on your 25th anniversary, and for anybody on the the call. You know how to contact us. And Kevin and Eric, if you have any questions that you didn’t think I’d answer today. Thank you so much.

339
01:07:56.740 –> 01:07:57.230
Stephen Marcus: So.

340
01:07:57.230 –> 01:07:58.180
Jake Marcus: Thanks. Everyone.

341
01:07:58.180 –> 01:07:59.069
Erik Davis: You guys, everybody.

342
01:07:59.070 –> 01:08:00.899
Kevin Davis: Thank you for having us. Thank you.

343
01:08:03.040 –> 01:08:05.999
Stephen Marcus: Jake, do you have cut and paste the questions.

344
01:08:06.130 –> 01:08:07.040
Jake Marcus: Yeah, I got them.

345
01:08:07.740 –> 01:08:10.540
Stephen Marcus: Perfect. Okay, cause they will. All were coming in at the end.

346
01:08:10.710 –> 01:08:13.009
Jake Marcus: I know. Yeah, we got quite a few at the end.

347
01:08:14.060 –> 01:08:15.540
Stephen Marcus: Okay, there’s still a bunch of people.

348
01:08:15.951 –> 01:08:18.010
Kevin Davis: Kennedy was on there. Huh!

349
01:08:18.120 –> 01:08:18.670
Jake Marcus: Oh, yeah.

350
01:08:18.670 –> 01:08:21.710
Stephen Marcus: Yeah, yeah, I was almost yeah. I was almost gonna put her on the spot

351
01:08:23.080 –> 01:08:28.540
Stephen Marcus: she was. She was telling me pictures of the 4 of us, the 5 of us on the screen.

352
01:08:29.350 –> 01:08:31.770
Jake Marcus: How do we? How do we look? That was a nice.

353
01:08:31.779 –> 01:08:34.343
Kevin Davis: She? She claimed that we look good.

354
01:08:34.710 –> 01:08:35.100
Jake Marcus: Oh!

355
01:08:36.195 –> 01:08:38.879
Stephen Marcus: Think she really meant Eric Sherry and Jacob.

356
01:08:39.029 –> 01:08:45.660
Stephen Marcus: But any event, thank you all so much.

357
01:08:47.979 –> 01:08:48.319
Sherry Branson: Great.

358
01:08:48.319 –> 01:08:51.649
Stephen Marcus: Gonna be down. Are you gonna be at the National Conference? Jake.

359
01:08:51.649 –> 01:08:52.579
Jake Marcus: Yes, Orlando.

360
01:08:52.990 –> 01:08:55.180
Jake Marcus: And though May 7th through 10, th and yeah.

361
01:08:55.409 –> 01:08:57.699
Stephen Marcus: And Eric, you got you gonna all gonna be there.

362
01:08:57.700 –> 01:09:02.460
Erik Davis: Yeah, I mean, we probably got an invite to our or do we didn’t. We didn’t send an invite for our dinner yet, but we’ll make sure.

363
01:09:02.460 –> 01:09:04.100
Kevin Davis: We ascended, we ascend it.

364
01:09:04.810 –> 01:09:06.409
Erik Davis: Did we get it? Where are we having it at.

365
01:09:06.810 –> 01:09:07.759
Kevin Davis: We don’t know yet. We just saved.

366
01:09:07.760 –> 01:09:10.219
Erik Davis: Oh, that’s also the date. But I didn’t.

367
01:09:10.220 –> 01:09:13.350
Stephen Marcus: Where? Where? Where’s the cop? Is it, Orlando? Is it?

368
01:09:13.350 –> 01:09:13.810
Stephen Marcus: Yeah.

369
01:09:14.590 –> 01:09:16.970
Jake Marcus: Rosenshingle, Rosenshingel.

370
01:09:16.970 –> 01:09:17.390
Kevin Davis: Yeah.

371
01:09:17.399 –> 01:09:18.949
Stephen Marcus: Yeah, they, yeah, they always go there.

372
01:09:18.950 –> 01:09:19.880
Erik Davis: Do it! There.

373
01:09:20.069 –> 01:09:30.039
Stephen Marcus: It’s a very difficult. You have to go there like 10 times before you can figure out how to find your room. I mean, it has a really it it was. I almost got lost there. I was

374
01:09:30.139 –> 01:09:36.779
Stephen Marcus: panicked and called from my cell phone because I I thought I was hopelessly lost. I I couldn’t find the exit.

375
01:09:37.119 –> 01:09:37.929
Stephen Marcus: the.

376
01:09:38.241 –> 01:09:41.039
Jake Marcus: Will be there. He just gave a shout out.

377
01:09:41.439 –> 01:09:44.369
Stephen Marcus: Okay, excellent! Alright.

378
01:09:44.729 –> 01:09:57.320
Kevin Davis: Got a question for you in about Florida, SP. 1, 50. That-that what do you know about it? What are you feeling? What you’re hearing. I mean, it’s like driving us crazy right now.

379
01:09:57.320 –> 01:10:00.749
Jake Marcus: Well, actually, which one cause there’s been about every.

380
01:10:00.750 –> 01:10:04.139
Stephen Marcus: And and we still have people listening in on the call.

381
01:10:04.140 –> 01:10:05.429
Kevin Davis: That’s okay. They can listen. They’ll learn.

382
01:10:05.995 –> 01:10:08.819
Stephen Marcus: Just wanted to make sure.

383
01:10:08.820 –> 01:10:18.019
Kevin Davis: Yeah, yeah, that’s good. Right? There was. Sb, what? 1? 54. I think that’s the one about the give me. You gotta get reserve studies and you have to have the

384
01:10:18.720 –> 01:10:19.360
Erik Davis: Milestone.

385
01:10:19.360 –> 01:10:21.280
Stephen Marcus: Like 4 d 2 b.

386
01:10:21.280 –> 01:10:24.150
Kevin Davis: That’s it. Yeah, that’s the one. Yeah, yeah. You gotta have.

387
01:10:24.150 –> 01:10:38.289
Jake Marcus: So there’s been condo. 1 point. Oh, condo, 2 point O condo, 3 point. Oh, I think you’re referring to 2 point. Oh, which? Yeah, that’s the reserve study, the required engineering reserve studies to be done, milestone inspections to be done.

388
01:10:38.290 –> 01:10:39.260
Kevin Davis: That’s it.

389
01:10:39.480 –> 01:10:57.420
Jake Marcus: Yeah, so that one I don’t know what’s going on with it. It seems like every day is something new. It it had been up until the date that was initially listed on the legislation was supposed to be December 31st 2024, and since then

390
01:10:57.420 –> 01:11:17.520
Jake Marcus: it still seems like almost half of the associations. At least I read an article the other day. This is half the associations have not even secured engineers. So I don’t I? I think, at least from my what I’ve seen I don’t know if it’s being enforced as much as it should, and some people are saying there was a glitch in it where

391
01:11:17.985 –> 01:11:23.279
Jake Marcus: it was called the Glitch Bill, where basically the date.

392
01:11:24.514 –> 01:11:26.236
Stephen Marcus: Was so funny.

393
01:11:28.050 –> 01:11:28.750
Sherry Branson: Spill.

394
01:11:28.750 –> 01:11:29.170
Kevin Davis: Yeah.

395
01:11:29.170 –> 01:11:29.560
Stephen Marcus: Yeah.

396
01:11:30.360 –> 01:11:31.890
Kevin Davis: The glitch.

397
01:11:35.880 –> 01:11:36.500
Stephen Marcus: How is that?

398
01:11:36.500 –> 01:11:38.540
Sherry Branson: And the the glitch, that’s all Christmas.

399
01:11:40.270 –> 01:11:46.099
Jake Marcus: So so. But I think that was a way out for like people to kind of, you know. Oh, here’s a

400
01:11:46.100 –> 01:11:47.610
Jake Marcus: there’s a mistake.

401
01:11:47.810 –> 01:12:16.289
Jake Marcus: Yeah, like, take like, get it, get it done. Do what you need to do. But I don’t think they’re really enforcing the the date that they put, and I don’t even think they’re enforcing the I mean again, who knows if they might start doing it? It’s like same with like the Cta stuff, I mean? Who knows if they were actually gonna enforce it? But as far as the requirement goes, it’s still out there. It’s still required. So I think a lot of people are trying to comply. There’s just a shortage of engineers, shortage of contractors.

402
01:12:16.320 –> 01:12:45.239
Jake Marcus: But yeah, I mean, it’s it’s in place. Usually Florida’s ahead on these things for better or worse. The other one condo, 3.0 that we had a webinar on that. And that is basically boards, requirements and managers requirements to have extra basically educational requirements. And boards are required to. I can send you the list. It’s there’s a list of several areas that basically, boards now have.

403
01:12:45.420 –> 01:12:52.409
Jake Marcus: As as we all know, it’s a volunteer board members for the most part. And now they’re having to do educational courses. So.

404
01:12:52.410 –> 01:12:57.200
Kevin Davis: But okay, the question, how do you enforce this stuff? I mean, in other words, right now, you have all these laws.

405
01:12:57.200 –> 01:12:57.990
Sherry Branson: Purchasing it. Yeah.

406
01:12:57.990 –> 01:12:59.719
Kevin Davis: How? How do you force it? You don’t right.

407
01:13:00.240 –> 01:13:28.720
Jake Marcus: Yeah, I mean, there’s the Dbpr, the department of business and professional Regulation. They have a division of condominiums. But I mean, that’s the that’s usually where I guess the the unit owners who are complaining will go 1st and try to file a complaint or launch something against the Board members. But beyond that, I mean, and that’s pretty. That’s that’s like a that’s an alternative dispute, in in my opinion. And it basically beyond that, it’s it’s not like people are.

408
01:13:29.163 –> 01:13:33.110
Jake Marcus: At least, from what I’ve seen, the enforcement doesn’t seem like it’s it’s really there.

409
01:13:33.110 –> 01:13:49.429
Kevin Davis: Can you do me a favor? This would be perfect if you could write up, we just said, because right now travelers are thinking that it’s going to be like massive, massive millions of dollars in lawsuits when I agree with you. Is that what? How were you harmed? Because you didn’t comply. How were you harmed?

410
01:13:49.730 –> 01:13:50.600
Kevin Davis: You know.

411
01:13:50.880 –> 01:13:53.780
Jake Marcus: As of now. No, as of now. It’s not, but.

412
01:13:53.780 –> 01:13:56.820
Stephen Marcus: It even gets worse, but maybe better for travelers.

413
01:13:57.731 –> 01:14:01.240
Stephen Marcus: The Miami Herald is doing

414
01:14:01.920 –> 01:14:11.729
Stephen Marcus: like this week is doing a series of articles, but it started with one where they’re tearing into the Florida Bar Association.

415
01:14:12.050 –> 01:14:13.580
Kevin Davis: Saying.

416
01:14:14.080 –> 01:14:27.660
Stephen Marcus: That the response to surfside relating to financial obligations and reserves would not have stopped

417
01:14:27.790 –> 01:14:31.299
Stephen Marcus: surfside from collapsing. Yeah, that, you know.

418
01:14:31.300 –> 01:14:56.270
Stephen Marcus: And this Bob Diamond is a huge advocate of that when all the reserve specialists are saying, Oh, no, we need something in the surfside legislate policy saying that, and proposed legislation that you have to have a reserve study. It was they sort of wanted it because it was a good time to ask. But there’s a school of thought that

419
01:14:56.330 –> 01:15:08.400
Stephen Marcus: the answer to Surfside was that when the Mirabedo did their engineering study and said, There’s 9 million dollars of problems that they addressed the 9 million dollars of problems versus waiting for

420
01:15:08.400 –> 01:15:31.940
Stephen Marcus: 5 years or whatever it was. And then, when it was 15 million dollars, they start doing the work. And while the building was collapsing there was a petition going around to rescind the assessment. But there is a school of thought that I don’t think the legislature in Florida is going to change it. But the school of thought, saying, sure that had nothing to do with that didn’t have enough reserves.

421
01:15:31.940 –> 01:15:52.870
Stephen Marcus: It’s they didn’t. They didn’t pay attention when an engineer said, If if you bring your car into a dealer and they say the engine’s going, and you do nothing well, shame on you if you don’t do something! The answer isn’t well. Gee! You should put aside money for this. The answer was, when somebody tells you that you have a problem.

422
01:15:53.450 –> 01:16:10.659
Stephen Marcus: You should take a especially your own engineer. You have to take it somewhat seriously, or get a second opinion and prove the wrong. So I don’t know how, when that’s going. But Baby Jake can get this Miami Herald series that’s going out this week, basically saying

423
01:16:10.770 –> 01:16:18.360
Stephen Marcus: reserves had nothing to do with surfside sort of interesting but.

424
01:16:18.360 –> 01:16:29.239
Kevin Davis: Right now, Florida, right now again, from an insurance point of view from DNA point of view, you have all these States like in California at the balcony rule. You know you have, you know, balcony inspections.

425
01:16:29.380 –> 01:16:30.520
Stephen Marcus: Yeah, yeah.

426
01:16:30.520 –> 01:16:54.931
Kevin Davis: But I don’t care about the balcony inspection, because it doesn’t. 1st of all, a lot of don’t have balconies. It’s not that. It’s not that many. But boy. Every Coast Association, Florida over 25 years have to have these milestone inspections. But what happens if you don’t get one? I mean, for some reason, it’s gonna be this massive. And I and I need what you just said is perfect, Jake. In terms of you know.

427
01:16:55.260 –> 01:17:05.459
Kevin Davis: it’s it’s if a unit owner is suing unit owner gets upset and sues, it’s a matter. Okay. We have to get one. I mean, there’s no damage. It’s not millions of dollars of damage. It’s just defense costs.

428
01:17:05.530 –> 01:17:07.980
Kevin Davis: And so I need. If you could put that in writing for me.

429
01:17:08.744 –> 01:17:37.035
Kevin Davis: Cause, you know, I mean again at the end of the day. If there’s damages, this damage goes the thing collapse, or because they didn’t have enough money to repair it, it’s more about repair maintenance, more so than is about this law. If yeah. Okay. So send me also to what you what you mentioned about who’s who would who? Who’s in charge of enforcement? Okay? And then they overworked, and they won’t be able to do it. And if they do, there’s no fines and penalties. There’s nothing. It’s just a matter of the

430
01:17:37.520 –> 01:17:45.070
Kevin Davis: How do you solve it? Well, they have to comply, and that’s the end of it. That’s it. So you could do that for me. That’s that’s you know, that big.

431
01:17:45.070 –> 01:17:45.639
Stephen Marcus: Okay, perfect.

432
01:17:46.270 –> 01:17:49.620
Stephen Marcus: I totally understand why travelers is concerned.

433
01:17:50.300 –> 01:17:53.569
Stephen Marcus: Because on the surface, is it? Is it?

434
01:17:53.800 –> 01:18:12.220
Stephen Marcus: Yeah? You think of a surfside, and that they’re the reserve should have been whatever 50 million dollars. And gee, we’re gonna get hits, because, they have a million dollars, and they should have had 50 million dollars, because the $2,000 that we weren’t.

435
01:18:12.220 –> 01:18:12.610
Kevin Davis: That’s what.

436
01:18:13.011 –> 01:18:19.440
Stephen Marcus: Those aren’t the kind of lost runs that we really want to have. But yeah.

437
01:18:20.420 –> 01:18:23.728
Stephen Marcus: But Jake has to also give

438
01:18:24.730 –> 01:18:30.640
Stephen Marcus: an honest opinion. Even though he’s he’s doing everything that.

439
01:18:30.640 –> 01:18:33.730
Kevin Davis: Oh, no, no, because we want I I want his honest opinion about.

440
01:18:33.730 –> 01:18:37.490
Stephen Marcus: No, no, his, his honest opinion favors you, which is.

441
01:18:37.490 –> 01:18:38.120
Kevin Davis: Yeah, exactly.

442
01:18:38.120 –> 01:18:40.249
Stephen Marcus: No, this isn’t. This isn’t a

443
01:18:40.420 –> 01:18:53.810
Stephen Marcus: this isn’t gonna put travelers out of business. These are gonna be billions of dollars of claims. It’s there’s no fines, there’s no no enforcement. It’s Jake. You can do that right.

444
01:18:53.810 –> 01:19:20.449
Jake Marcus: Yeah, absolutely. And and I think I well, I think the bigger picture a lot of it has to do with what we see with the as far the insurance side. Yeah, I don’t see it. I don’t see it being all these damages by way of lawsuits or claims, or what have you? I see it more with the lending issue and the Fannie Mae kind of. They’re kind of making it hard to secure loans with traditional financing. We see it more on that side than anything.

445
01:19:20.450 –> 01:19:22.778
Kevin Davis: Put it, put it in writing after everything you just said.

446
01:19:23.400 –> 01:19:26.600
Kevin Davis: longer and more detailed is better that travels love that kind of stuff.

447
01:19:26.600 –> 01:19:33.740
Erik Davis: Make, make it super, make it make it look super legal, too, so that it has, like all the like, even if it has to be notarized, and all this other stuff, so that.

448
01:19:33.950 –> 01:19:34.730
Jake Marcus: What happened.

449
01:19:35.227 –> 01:19:36.720
Jake Marcus: I’d love to.

450
01:19:37.150 –> 01:19:49.480
Stephen Marcus: Yeah, and and and of course Jake has to give the opinion he believes. But what what I was trying to say wasn’t yeah, that he wasn’t. Gonna do that. What I’m saying is that

451
01:19:49.700 –> 01:19:52.789
Stephen Marcus: the he and you agree, Kevin, that

452
01:19:52.890 –> 01:20:05.580
Stephen Marcus: this is not a hundred 1 billion dollar dollars of claims that that travelers is gonna see in Florida because of this. And and now you have New Jersey with. They followed with the legislation.

453
01:20:05.580 –> 01:20:07.920
Stephen Marcus: They have one, too. Yeah, they have theirs, too.

454
01:20:08.090 –> 01:20:10.170
Jake Marcus: Yeah. Yeah. New Jersey hasn’t a lot of.

455
01:20:10.170 –> 01:20:14.110
Kevin Davis: You know, it’s funny. We have 22 people still here. Hope is one of those travelers.

456
01:20:15.337 –> 01:20:17.622
Stephen Marcus: I think it’s Karen Kennedy.

457
01:20:19.560 –> 01:20:20.350
Jake Marcus: The overachiever.

458
01:20:20.350 –> 01:20:22.650
Stephen Marcus: We, we should have had her as a panelist.

459
01:20:23.897 –> 01:20:24.970
Stephen Marcus: We can do.

460
01:20:24.970 –> 01:20:26.100
Kevin Davis: Oh, yeah. But rabbit.

461
01:20:26.100 –> 01:20:27.090
Kevin Davis: Yeah. Yeah.

462
01:20:27.090 –> 01:20:28.950
Stephen Marcus: Twin Rivers revisited.

463
01:20:29.950 –> 01:20:32.210
Stephen Marcus: But anyway, thank you.

464
01:20:32.210 –> 01:20:34.379
Kevin Davis: You know, I tell you, heard the the.

465
01:20:34.380 –> 01:20:35.109
Stephen Marcus: Yeah. Go ahead.

466
01:20:35.110 –> 01:20:37.510
Kevin Davis: But but the 1st claim we ever had

467
01:20:37.670 –> 01:20:48.830
Kevin Davis: I was Ocean Club in New Jersey. Richard Kennedy did it right. Richard Kennedy was the Guy handle it. Every time Ian Graham saw Richard Kennedy, he said, I put your daughter through college with that account.

468
01:20:50.470 –> 01:20:52.370
Stephen Marcus: Every time.

469
01:20:52.370 –> 01:21:12.169
Kevin Davis: Saw Karen Kennedy, and last time you know he was there he saw he bet care I put you through college. So every time I see, Karen, I said, you know, and Richard Kennedy did was hire all his all the travelers, all the Ci people from New Jersey as consultants, I mean? That was a huge claim. It was like a million Dollar Claim Ocean Club out of New Jersey.

470
01:21:12.170 –> 01:21:13.890
Stephen Marcus: Was Marshall Frost involved.

471
01:21:14.420 –> 01:21:15.970
Kevin Davis: Yeah. Yeah. He was definitely was involved.

472
01:21:15.970 –> 01:21:20.780
Stephen Marcus: Yeah, yeah. Richard became the Richard and Marshall show.

473
01:21:20.980 –> 01:21:27.109
Stephen Marcus: Yeah, I remember Karen show. And and Karen and her dad were just so so close and

474
01:21:27.470 –> 01:21:28.200
Kevin Davis: Yeah, well.

475
01:21:28.200 –> 01:21:50.179
Stephen Marcus: When I was talking to my class the other day, he he started going back to when they were writing the policy in his basement, and with Richard Kennedy. Eventually they brought on George Noak and a few others, but it was like a Who’s Who, because he said, well, none of us really knew.

476
01:21:50.340 –> 01:21:50.910
Kevin Davis: Yep.

477
01:21:50.910 –> 01:21:53.610
Stephen Marcus: What we should, what we were supposed to be doing.

478
01:21:54.010 –> 01:22:20.030
Stephen Marcus: but and I knew less than anybody. So I brought in, like Richard and all these other people who had a few years of experience ahead of me, and we tried to come up with the best that we could. But you never know until the start and the funniest story Mark’s ever told me is, well I ever tell you about the the 1st claim we had said no mark, and maybe the 1st insurer was Utica.

479
01:22:20.030 –> 01:22:21.190
Kevin Davis: Yeah, Utica. That’s what’s.

480
01:22:21.190 –> 01:22:26.030
Stephen Marcus: So he said, so they’re in business. They have the 1st policy.

481
01:22:26.750 –> 01:22:29.230
Stephen Marcus: And there’s a claim for a fire.

482
01:22:29.630 –> 01:22:39.930
Stephen Marcus: Yeah, so this isn’t good. But yeah, they have a policy. It covers fire and then

483
01:22:40.040 –> 01:22:45.720
Stephen Marcus: a week later, there’s a second fire at the same place, and

484
01:22:46.470 –> 01:22:50.399
Stephen Marcus: Bob Bobber Blassett says to him.

485
01:22:50.730 –> 01:22:56.810
Stephen Marcus: Nice business idea, Mark! And then there was a 3rd one who was an awesomeist.

486
01:22:57.580 –> 01:22:57.920
Erik Davis: And I.

487
01:22:57.920 –> 01:23:03.080
Stephen Marcus: It was a. It was a very, very 1st policy that I assume they had.

488
01:23:03.200 –> 01:23:07.550
Stephen Marcus: They didn’t have 2 nickels to rub together, and

489
01:23:07.800 –> 01:23:12.229
Stephen Marcus: barber sees this and says, Oh, my God, this is the worst.

490
01:23:12.230 –> 01:23:12.550
Stephen Marcus: Yeah.

491
01:23:12.550 –> 01:23:14.045
Kevin Davis: Year I ever heard.

492
01:23:15.700 –> 01:23:20.319
Stephen Marcus: and I never am totally sure how much mark is embellishing, and how much.

493
01:23:20.320 –> 01:23:21.610
Kevin Davis: That’s true.

494
01:23:21.610 –> 01:23:28.999
Stephen Marcus: But I I really do believe that his 1st policy had 3 fire claims in 3 weeks.

495
01:23:29.560 –> 01:23:29.980
Kevin Davis: To me.

496
01:23:30.623 –> 01:23:31.910
Stephen Marcus: Anyway. Yeah.

497
01:23:31.910 –> 01:23:35.990
Kevin Davis: Alright. Listen, guys, thanks a lot. And this was a good time.

498
01:23:35.990 –> 01:23:37.029
Erik Davis: Yeah, we’ll definitely do this together.

499
01:23:37.030 –> 01:23:37.540
Erik Davis: And sometimes.

500
01:23:37.540 –> 01:23:38.880
Kevin Davis: Soon for sure.

501
01:23:38.880 –> 01:23:40.500
Stephen Marcus: Okay. Alright. Thank you very much.

502
01:23:40.500 –> 01:23:41.500
Kevin Davis: Thanks, bye.

503
01:23:41.500 –> 01:23:42.570
Sherry Branson: Thanks for having us.

504
01:23:42.570 –> 01:23:42.920
Jake Marcus: Absolutely.

505
01:23:42.920 –> 01:23:43.540
Stephen Marcus: Bank.