Condo Media - April 2016 - 31

Also important to note: Many insurance companies are specifically excluding cyber coverage from new policies
and often contesting cyber claims based
on existing coverage. So the limited
coverage associations and management
companies may find in an existing
policy is unlikely to be available in the
future-unless they purchase cyber
coverage.
'YOU GET WHAT YOU PAY FOR'
Some insurers offer cyber coverage as an
add-on or endorsement to an existing policy, for as little as $50 in some cases. But
Pierce cautions, "You get what you pay
for." If the cost is miniscule, the coverage
is likely to be miniscule as well. A "monoline" or standalone policy written by a
specialty insurer will provide the most
protection at the lowest cost, he says.
Meskin agrees. "How often has an
insurance company offered something
for nothing?" he says, noting it's a rea-

sonably good bet the coverage available
for $50 will not match the coverage in a
policy costing $1,000 or more.
"Without any finagling, I could probably get a decent association policy
for $1,500," Meskin says. Coverage for
a management company would cost
a little more because the exposure is
much greater. But the protection these
policies provide would be comprehensive and it would target the risks associations and management companies
need to address.
Still, cyber coverage can be a hard sell,
especially for cost-resistant board members, many of whom aren't yet convinced
they need the protection. Crandall says
boards should view cyber insurance as an
essential cost of doing business, like fire
insurance. And fire insurance, he says,
"certainly isn't expensive compared with
the cost of reconstructing a building."
Meskin advises brokers presenting
coverage options to begin by describing

the policies. "If you start with the cost,"
he says, "that's all the boards will hear."
He also emphasizes the need to explain
clearly the difference between the $50
endorsement and the $1,500 cyber
policy, so board members understand
the coverage they get with each.
Pierce tries to educate his clients
in the same way. Boards need to understand their risks and make an educated decision about how to manage
them, he says. After analyzing their
risks and finances, some may decide
to forego cyber coverage and absorb
any losses they incur. "Self-insuring
as part of a business plan is fine,"
Pierce says. "But self-insuring out of
ignorance is not."
■ NENA GROSKIND IS PRESIDENT
OF ECONTENTPLUS, PROVIDING
EDITORIAL CONTENT FOR
WEBSITES, PRINT AND ELECTRONIC
NEWSLETTERS, AND MAGAZINES.

pick the right tools

for your next project.
With community association lending expertise like ours,
you'll get the job done right.

take that to the bank.
Erin Bowen CMCA
VP/Regional Account Executive
860-459-4713
Toll Free 866-800-4656, ext. 7481
erin.bowen@mutualofomahabank.com

mutualofomahabank.com
AFN46067_0913

Member FDIC
Equal Housing Lender
EQUAL HOUSING

LENDER

April 2016

Condo Media - April 2016

Table of Contents for the Digital Edition of Condo Media - April 2016