The Marcus Hour | 7.30.25 | Ep. 24 | Advanced Session: Navigating Insurance for Large Major Projects in Condominiums, featuring Val Feeney, CIC, CRIS, Alera Group

This advanced session for property managers, board members, and insurance professionals will take a deep dive into the critical insurance considerations surrounding major capital improvement projects in condominium communities.

Topics covered will include evaluating appropriate contractor insurance for large-scale repairs, understanding Builder’s Risk and Owner’s Interest coverage during construction, and the importance of verifying workers’ compensation policies. We’ll also explore recommended umbrella limits over Directors & Officers, Commercial General Liability, and non-owned/hired auto policies. The session will also cover the necessity of independent insurance appraisals for replacement or reconstruction costs, and the impact of rising construction costs—including tariffs—on project planning and risk management.

Don’t miss out on this invaluable opportunity to gain insight from industry experts and elevate your condominium governance practices, on July 30, 2025, 10AM

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Jake Marcus: yeah. So I guess we’ll just kind of get started as people flow in today. We have a very exciting Marcus hour. We’re talking about big major projects, navigating insurance for large major projects and condominiums and other kind of hot topics in that realm. Basically, you know, dealing with large projects dealing with

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Jake Marcus: capital projects, what you should do as a manager, what you should do as a board, and also how it ties into the insurance implications

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Jake Marcus: and large projects on that end. What you should do at the beginning, before a large project gets started during, and also what you should do after, as it relates to insurance in particular. And on that note we have a very special guest. It’s Valentine’s day in July, as we have Valentine Feeney, a partner at Alera Group.

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Jake Marcus: He’s been a risk management and insurance insurance strategy, specialist guides, boards and property managers in particular.

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Stephen Marcus: But but with the Alera Group.

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Jake Marcus: With the Alara Group.

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Stephen Marcus: So we don’t cause any confusion here.

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Jake Marcus: Yes, exactly so.

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Jake Marcus: He’s like

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Jake Marcus: he’s a partner at Alera Group, and he has been involved for over a decade. Is that right, Val?

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Val Feeney: Yep, 15 years!

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Jake Marcus: Very good. And so he’s worked with the associations nationwide as well as in New England.

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Jake Marcus: based out of Walpole, Massachusetts.

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Jake Marcus: and and he is, can provide some effective and and very, very tailored to your association, which is is something that we’ll get into. Kind of. It’s not a 1 size fits all approach, especially when it comes to capital projects

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Jake Marcus: and large projects of that nature to make sure that you’re addressing it as it fits to your case very case by case analysis that goes into that same thing with renewals insurance in general. We don’t say one of our general kind of tips or tidbits is we try to. You don’t just say, Oh.

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Jake Marcus: you know, we just need insurance for our condo that can vary. You want to make sure that you get the proper coverages in place. Dno general and different types of insurance that we have discussed in other sessions. But that’s a little more of a broad range. Approach again.

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Jake Marcus: This is the Marcus hour and I will get a get the slideshow started as we introduce our usual host, Stephen Marcus is along with me the original.

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Stephen Marcus: I’m the one I’m on the one on the right top.

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Jake Marcus: He? He’s

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Jake Marcus: yeah, he’s the one on the which one? Which? Which right? Which right are you talking about?

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Stephen Marcus: The the one that’s not the picture of some old man with the largest, either the largest cheekbones in the world or the fattest man in the world.

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Jake Marcus: Yeah.

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Stephen Marcus: And I did hear about the

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Stephen Marcus: big guy who had metal on him who was recently. It was tragic. He was killed. He was sucked into an MRI machine because he was wearing metal. But

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Stephen Marcus: but but I digress. But but, Jake, can I get my

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Stephen Marcus: the 2 min thing I spoke about.

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Jake Marcus: Yes.

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Stephen Marcus: Thank you. So things change rapidly in this business

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Stephen Marcus: for me. The last thing I learned of importance relating to insurance was at about 1030 pm.

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Stephen Marcus: Last night.

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Stephen Marcus: And it relates to the 8 point something, the huge earthquake in Russia which is

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Stephen Marcus: like causing a tsunami with concerns grave concerns in Hawaii, Alaska, Japan the West Coast.

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Stephen Marcus: And yes, I 1st of all, and foremost, I thought.

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Stephen Marcus: and prayers are with the the people in those areas that everybody end up safe.

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Stephen Marcus: But how it relates to the larger insurance issue for condominiums, community associations is without knowing anything.

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Stephen Marcus: Yeah, I’m guessing that this will, the loss to the carriers from this event

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Stephen Marcus: that nobody could have predicted. As far as I can tell, will be in the billions.

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Stephen Marcus: I mean, Val would know better than I. But the 10,000,010,000,000,000 with a B or more, a hundred 1 billion. Nothing would surprise me because I don’t know enough yet what the impact’s gonna be.

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Stephen Marcus: But so why do we care if, say, you’re in New England? Well, insurance carriers

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Stephen Marcus: ever in the business of making money, like most businesses are.

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Stephen Marcus: and if they have a hundred 1 billion dollar hit

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Stephen Marcus: somehow, they make it. They make it up. How do they make it up. They increase premiums.

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Stephen Marcus: Maybe they hit the people in those areas more.

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Stephen Marcus: But this is such an unusual event that I’m not sure it will be the case, but I have a feeling that you may be feeling the pain.

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Stephen Marcus: Just as you were getting used to premium, settling down a little bit for condominium associations.

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Stephen Marcus: Life in the Condominium world is always fast paced and furious, and last night.

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Stephen Marcus: I think, is a another game changer.

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Stephen Marcus: So with that. Let me turn it back to Val. And for Jake for what you’re really here to hear about.

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Jake Marcus: Thanks, Stephen, and yes, that’s a good point where something that happens across the nation. Insurance wise may affect different areas of the country and the insurance approach across the nation into different regions. We saw it with

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Jake Marcus: the surfside collapse in Florida. That was a big, unfortunate, tragic event that occurred, and has still, I mean, while Florida’s in a

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Jake Marcus: pretty big insurance crisis that is definitely still affecting other areas of the nation as there’s it’s a business and a lot of other areas are affected as a result. But today, yeah, we’re getting into large major projects and condominiums and other areas,

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Jake Marcus: and kind of what goes into. You know, a major project at a Condominium association. Usually these are, you know, needed projects or projects that you know, a big roof repair, or something of that nature. Val. Val. What are some of the what are some of the big projects that I guess you kind of see a lot in your field.

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Jake Marcus: and that are affecting from the insurance perspective that you see are affecting the association.

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Val Feeney: Yeah. Hey?

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Stephen Marcus: And and maybe with that is, did suicide Trigger.

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Stephen Marcus: as I think it might have.

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Stephen Marcus: And we know about the building in Cambridge, where there’s a the risk of a collapse in the city has cordoned off areas, and and it’s tragic. If it’s anybody’s fault, it goes back to whoever built it 40 or 50 years ago, whenever it was built.

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Stephen Marcus: but you that was triggered by an structural inspector and inspection in 2,023. I don’t think it’s a coincidence that surfside goes down on June 24, th 2021,

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Stephen Marcus: and the reaction is more and more. Condominium associations are getting these structural and facade inspections and all.

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Stephen Marcus: And it’s great that in terms of maintaining the building but can be horrific in terms of one the costs and then getting association loans and all that kind of stuff.

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Stephen Marcus: and the the the other issue. As you all know, is

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Stephen Marcus: Fannie Mae and Freddie Mac will then consider the project ineligible for loans from them until

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Stephen Marcus: all of the work is complete, Tom, sorry for interrupting.

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Val Feeney: No, all good, all good

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Val Feeney: Stephen and Jake. Thanks for having me once again. Val Feeney from Alera group. I’m a property and casualty expert here, based out of Boston, I work with condo associations nationwide to answer your 1st question. I think the most common projects we see these days is a full roof replacement

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Val Feeney: which can be very complex on, on large multiple building or high end condominium associations.

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Val Feeney: And the exterior facade is also another very, very common one. We’re seeing, as well as your full blown renovation to common areas throughout the the Association. And then, you know, 1 point to kind of jump on Steven’s tangent about Fannie and Freddie.

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Val Feeney: You know, as an insurance professional. I do feel the frustration from associations because

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Val Feeney: the property insurance market has been in the worst condition. It’s been over the last 7 years, probably in its history, recorded history, and instead of becoming more lenient with insurance requirements during that time associations were having a hard time finding even basic coverage. No, they went the opposite direction, and they ratcheted up their requirements on associations which then led to a whole slew

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Val Feeney: of unit owners, not being able to sell their individual units because the Association couldn’t find the required insurance in the marketplace, usually, or sometimes

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Val Feeney: at no fault to their own. So definitely a hot button issue. So today, I think, you know, between the legal side and the insurance side, we want to give. You know, viewers, the practical tools they can use tomorrow, whether you’re a manager or board member or a contractor work in these communities. You know, the session isn’t about selling you on anything. It’s about clarity, you know. If you leave here understanding the key questions to ask

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Val Feeney: prior to a large renovation or capital improvement, and and knowing when to get the professional help or when to pull in the experts, we’ve done our job.

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Jake Marcus: Excellent. Appreciate that, Val. And yeah, that’s a good segue into what we’re looking at today and an overview of the session today. Again, this is a supposed to be an interactive process, kind of a informal but educational session, where we kind of provide insight on what we’re seeing, but also we encourage as many questions or comments throughout.

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Jake Marcus: We know you can’t. You can’t shout at us through the screen, but if we I think there’s a way to bring up on stage potentially as a participant. We may hold off on that for today. But if you have questions, type in the chat Q&A, and comment on whatever you may be seeing in your positions as either manager, board members, contractors. What have you, and what

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Jake Marcus: are kind of some of the best practices from every perspective. What you see. If you’re a contractor, you know.

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Jake Marcus: what would you look to advise the condo on whether they have potential grounds for heading into litigation, whether they are starting the project, what kind of things you need to look for, whether you do the work? If it’s preventative? I know Val mentioned

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Jake Marcus: exterior facades and roofs and things of that nature that are

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Jake Marcus: important to ensure that are fixed appropriately, but also expeditiously. So. We’ll get into kind of what we see, as far as whether it’s board members or managers, and kind of some of the the common mistakes that

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Jake Marcus: we see when it comes to addressing or not even mistakes. But you know what we see as best practices for moving forward in addressing large multimillion dollar projects. How do you, how do you properly bring in the right experts to review the issues? How do you

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Jake Marcus: de determine how to implement a plan? And you know

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Jake Marcus: from our legal perspective, what to do as far as litigation and how to approach that. And then, also, you know, filing insurance claims figuring out what insurance you have in place before it even happens, is also a prophylactic measure that can be considered. And then what you do during the project keeping the unit owners informed.

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Jake Marcus: determining what to kind of what to do as far as

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Jake Marcus: cost effectiveness for for the association. Getting a loan, we discussed Fanny and Freddie getting involved. Are you going to be restricted from getting a loan? Just different things and different strategies to consider when it comes to these large capital projects.

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Stephen Marcus: One thing to note Jake, is for people on the call either Monday or Tuesday.

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Stephen Marcus: Everybody who signed up will receive the recording of this webinar the Powerpoint.

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Stephen Marcus: and at least summary answers not to be taken as legal advice or insurance advice. Go to your own trusted advisors, but something to give a little guidance in terms of your questions. What I’m interested in is so associations are getting these loans biting the bullet on a 5 million dollars project, whatever the amounts are.

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Stephen Marcus: and

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Stephen Marcus: the screen that’s up. Come mistakes, boards make. We don’t really mean that we we mean what are mistakes? Boards and managers can avoid, and how to avoid them, because we don’t expect that any manager or board member

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Stephen Marcus: should know the answers to

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Stephen Marcus: the questions, such as what insurance should the design professionals and and contractors have? So you don’t have to know everything but I’d be really interested in hearing from Val. As to

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Stephen Marcus: what he believes the association and the manager and the attorney for the Association should be looking at when these projects come in, and you’re bringing in architects, engineers, contractors, hubs

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Stephen Marcus: who do you have control over? What? And what protections? Val, take it away.

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Val Feeney: Yeah, sounds good. If we want to jump into the next slide, I think.

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Stephen Marcus: Yeah. That’s the next slide.

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Val Feeney: Yeah, we can. We can dive right in.

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Val Feeney: Yeah. So I think you know

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Val Feeney: the the contractor’s insurance requirements. So you know, 1st and foremost, a board is likely going to hire or use their property manager as a bit of a construction manager during the process, or they’ll hire a 3rd party project manager for this type of work. So the 1st thing the Board wants to do is make sure that they have a contract

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Val Feeney: that basically transfers their risk for a fee from themselves to the project manager or the property manager that they’re hiring to oversee the project, and that same contract will then filter down to the general contractor. So I think 1st and foremost kind of your risk transfer is super important, and then, I believe, Steven alluded to

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Val Feeney: the board and what they’re communicating to the Association nowadays, I think, especially since surfside boards are being targeted. It’s no longer a you know volunteer gig where you did it just because you can add some value, and you have some free time. That’s a great pie in the sky belief. But the issue now, with so many lawsuits and the litigation surrounding communities.

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Val Feeney: you really have to protect yourself, and the best way to do that is transferring risk to experts you hire, and also being super transparent with your board minutes to the Association. Those essentially will help defend any decisions you make on behalf of the association. So that being said, we’re going to dive right into the types of insurance

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Val Feeney: that your contractor should have. Why, it matters is the contractor’s insurance is your 1st line of defense. If something goes wrong, so think property damage an injury on the site, or an accident involving any of the subs or contractors. Vehicles coming in and out of the property. Those are kind of, you know, typical here.

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Val Feeney: but the the pitfalls we see constantly is boards. Assume that if a contractor has a certificate of insurance that lists them

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Val Feeney: as a cert holder or hell, even an additional insured AI that everything is covered. But that’s just not the case. In reality, most insurance certificates don’t tell the full story at all. They miss details, and those missing details, such as important endorsements and exclusions, can actually leave the association exposed to hundreds of thousands of dollars in

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Val Feeney: the event of a major issue. So it is really important to go just deeper than the general, you know. Cert insurance. Cert that you kind of hear so much about.

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Stephen Marcus: And and one thing that touches just quickly into the legal. But but it’s on your end as well. You see it all the time is.

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Stephen Marcus: it drives me crazy, maybe because I’ve been doing this for so long.

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Stephen Marcus: But I discovered decades ago that certificates of insurance are useless.

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Stephen Marcus: If you look at the accord form

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Stephen Marcus: and the bold print at the top.

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Stephen Marcus: It basically says that.

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Stephen Marcus: let’s say on the additional insured. Val, said AI. It’s not artificial intelligence this time, it’s additional insured.

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Stephen Marcus: The form says this form does not confer any rights on the certificate holder.

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Stephen Marcus: You may only be added to as an additional insured

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Stephen Marcus: by an endorsement to the policy by the carrier.

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Stephen Marcus: In other words, the local insurance agent, Bell, can’t just ask for something at 12. I need it at 1230.

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Stephen Marcus: He can’t just send you out something. He needs the carrier to issue the endorsement

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Stephen Marcus: so that that be careful in terms. Maybe Val’s gonna get into that on verification. But

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Stephen Marcus: I think the biggest mistake I’ve seen is everybody accepts certificates of insurance.

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Val Feeney: Yeah.

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Stephen Marcus: He’s every everybody.

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Val Feeney: Yep, and very common, and I’ll give one quick example before I dive into these coverages that I think, highlights what you just said.

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Val Feeney: One of the biggest exclusions I see, or most common exclusions I see when it comes to general contractors and subcontractors insurance policies these days is an exclusion for residential condominium associations.

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Val Feeney: The insurance industry does not like large condo associations anymore. For obvious, you know, for the reasons why you have a hard time getting an insurance, and general contractors and subcontractors aren’t, and their agents. Unfortunately, some of them aren’t paying attention to the exclusion. So if something goes wrong and your board or their insurance agent didn’t review the exclusions. And that pesky residential Condominium Association exclusions

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Val Feeney: is in there. There’s no coverage from the general contractor. So that’s why, this stuff is important and I digress. But we just wanted to highlight. Why, exclusions and endorsements matter other than just their certificate of insurance. So I’m not going to get too much into the weeds on these. But these are just kind of the basic things that you need to see. So from a general, we’re talking about the general contractor. You hired him for your project, and this is the coverage that you need to verify

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Val Feeney: your own as the Board, or with your project manager. They need to have general liability which protects against bodily injury or property damage caused by the contractor’s work.

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Val Feeney: Generally speaking, a million dollars per occurrence, and 2 million dollars aggregate are the minimum here, with higher limits for large projects, and we’ll get into that. You want to ensure your Association is listed as an additional insured, and that coverage is primary and non-contributory. So your policy isn’t tapped first.st You’ve actually, you’re going to use the general contractor’s insurance. If something goes wrong

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Val Feeney: and you got workers, compensation which covers injuries to the contractors, employees that’s absolutely mandatory. If they don’t have it, and someone is hurt, your association will be liable. So you want to verify that coverage applies in your State to all subcontractors. The State of Massachusetts, for example, and most States do. They have websites where you can plug in your contractor’s name and zip code.

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Val Feeney: and it will pull up their workers comp policy. And if it’s effective, or if it’s in force. And then, lastly, is auto liability covers accidents involving contractor owned or hired vehicles on site again, minimum of a million dollars key for projects where materials are constantly delivered or hauled away, or you have dozens of employees on the job site every day. We’ll get into the umbrella coverage. That’s also a requirement. But for now we’ll jump down to the recommended limits

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Val Feeney: and sorry if I’m flying here. I just want to get touch on the key points, and then we can do some follow up if needed, for major capital projects. I’ll say 6 figures or higher, or you know, 7 figures.

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Val Feeney: You got to have a million dollars on your Gl and your auto liability, plus the contractor has to have umbrella coverage or excess liability coverage for the sake of this conversation we’ll consider them the same, even though they’re slightly different. The contractor has to have an umbrella in today’s day and age for a large project. They have to have a minimum of a 5 million dollars umbrella. There’s no way around that. They’re going to pass the cost on to the board. That’s fine, but they need to have that in place.

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Val Feeney: Your association’s own umbrella won’t extend to the contractor. That’s not what your umbrella is for. So the general contractors limits must stand alone on their own. All right.

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Val Feeney: Next we want to talk about verification. How do you verify that stuff? Yep, sorry. Go. Anyone.

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Stephen Marcus: Is it safe to say that

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Stephen Marcus: as a side note that if you’re saying 5 million for contractors, that for associations, the 1 million 2 million that is crazy, and that

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Stephen Marcus: you’re looking at at least 15 million 25 million. 50 million. 100 million. We have the double murder in the penthouse Condominium in South Boston.

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Stephen Marcus: I believe this. I don’t know what the settlement was. It was confidential, but I’m under the impression that was probably over 20 million dollars. What do you do if you have 2 million dollars of insurance and a board or the manager have to go to a unit owners meeting and say that they’re short by 18 million dollars, and every unit is going to be assessed. Sorry.

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Val Feeney: No, no, I definitely get it. Will I? I do believe we get into it in a couple of slides. But yes.

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Stephen Marcus: Oh, okay. Cool.

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Val Feeney: Smaller associations. Probably you have to have a minimum of 3 now, but if you’re like the second year, medium size, or larger or high end. 5 million is your your base.

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Val Feeney: So you know, verification, you know best practices for verification. Never like well, like we mentioned, never rely solely on certs or insurance certificates. The certificates are a snapshot. They don’t guarantee coverage. You want to request the actual policy endorsements. You want to read, and you can have your agent do this, you can have a consultant. You can have the project manager, the property manager.

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Val Feeney: They want to request the actual policies from the general contractor read the endorsements for the additional insured to make sure that you’re covered the waiver of subrogation and primary and non-contributor wording. I know I’m kind of throwing jargon at you, but that stuff’s important, and your agent will know what it is

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Val Feeney: you want to check. Expiration. Dates assert from 6 months ago might already be invalid, right? The biggest pitfall I see around like getting caught with a sub having no coverage is around that renewal date, because maybe they’re a risky type of sub. Maybe they’re a roofer. Right? Roofers have a hard time obtaining really competitively priced insurance. So around their renewal is extremely kind of risky, because

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Val Feeney: maybe they’re waiting to the 12th or the 11th hour to secure coverage. And all of a sudden it lapsed for a few days. Right? So that’s kind of the. There’s a minefield around expiration dates.

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Val Feeney: And then, lastly, indemnification agreements often overlooked. And this kind of goes back to Alkark, and Marcus is even if insurance is in place, you want a strong indemnification clause in your contract that way. The contractor legally agrees to defend and hold the association harmless if their work causes a claim, think of it as a backup plan to your insurance. If coverage lapses or it’s denied, this clause gives you another path to recover costs.

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Val Feeney: So you know, very important when I talk about risk transfer with the contract, because a lot of the insurance language, both the general contractors, insurance, and all their subs actually fall back onto what the wording is in the contract. They don’t just automatically give you that coverage. No, the endorsements read when required by contract, and that’s why those contracts have to be the kind of leading edge of your planning.

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Val Feeney: And then, finally, the most common mistakes I see, boards don’t verify general contractors insurance, or the kind of the rules that the Gc. Is putting on the subs. The Gc. May be insured, but maybe the subs aren’t because the Gc. Is fast and loose with what their subs are doing right. You don’t know that when you you got to kind of flush that out when you’re interviewing the Gc.

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Jake Marcus: Great. And and yeah, one of the one of the main things that or there’s a lot of good value, valuable points right there. One thing. That kind of that I’ve been seeing a lot recently is yeah. When when these major capital projects are either about to start out or on the horizon, or even

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Jake Marcus: during and while they’re going on there will be a lot of speculation on the board directly, and even the manage management group involved.

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Jake Marcus: and they’ll be getting a lot of questions. Fielding, a lot of questions. So it’s important, really, to just document what goes into this really take it serious when entering into the contracts. Yeah, getting in, making sure that these provisions and clauses are included. Indemnification, indemnification clause included in these agreements is key.

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Stephen Marcus: Quick, quick, quick, quick question, based on something that Val said that could be

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Stephen Marcus: phenomenal. Well, actually, either answer is phenomenal.

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Stephen Marcus: He didn’t say that insurance policies

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Stephen Marcus: have to be reviewed by an attorney, and he’s probably gonna tell you that there are very few

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Stephen Marcus: attorneys who understand insurance policies, and he’ll probably tell you that there are a whole lot of attorneys

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Stephen Marcus: board members, managers, and everybody else in the world

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Stephen Marcus: who have never read a full insurance policy.

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Stephen Marcus: There’s a saying called Bill Russell from the big guy came up with Rtfp. Which stands for read the

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Stephen Marcus: It could be full policy, but he sometimes uses that for another word. But my question is so, that’s critical.

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Stephen Marcus: But are you saying that if you are the insurance agent?

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Stephen Marcus: Are you talking about that, you

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Stephen Marcus: or other agents? Or maybe it has to be insurance advisors.

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Stephen Marcus: Review these policies, for you’re insured.

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Stephen Marcus: and do you do it on a hourly rate.

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Stephen Marcus: a flat fee as part of

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Stephen Marcus: services because I could see reviewing, not just the Gc’s contract, but also the architects, the engineers all the subs. How does it work?

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Stephen Marcus: And those are costs.

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Val Feeney: Yeah, great question. Oftentimes, with our larger property management clients.

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Val Feeney: we have a very good relationship, or, you know, very thorough with our communication back and forth with the property management employee who’s working with the board, and if they bring that to our attention we’ll help them review. It also is very important for the general contractor’s insurance agent to do a thorough job and know that the general contractor is doing a 8 million dollars project for a residential

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Val Feeney: condo association that might otherwise be excluded unless it’s with the carrier that allows that type of work. So I believe strongly, there’s a lot of there’s a lot of very thorough

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Val Feeney: and expert insurance advisors out there. But oftentimes we see basic exclusions that you’d be shocked that are in there. So it kind of goes twofold. Am I the agent for the the board at the Association? I’m happy to review that and kind of train them or teach them what I’d be looking for upfront. So then they can do that. Once they kind of copy my system

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Val Feeney: with the help of the property manager or the property manager will bring us in, and kind of do the same thing. So it’s a bit of a 1 off

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Val Feeney: we don’t charge for it. I probably could certainly a larger associations. I am also a license insurance advisor, so I can be brought on for a fee, not even to be the insurance agent just to pay attention to the insurance while the project is going on for a fee. So long.

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Stephen Marcus: But the important thing is whether you charge or don’t charge. That’s your business decision. And to me

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Stephen Marcus: huge value added, if you don’t judge but if you’re saying that

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Stephen Marcus: what boards and managers should be considering is speaking to

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Stephen Marcus: a trusted insurance agent or advisor, such as yourself.

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Stephen Marcus: who knows what they’re doing? Who is the agent for the Association, and that there are people there experts such as yourself, who will look at these policies.

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Stephen Marcus: A lot of the problems will go away because

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Stephen Marcus: it’s sort of like me saying.

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Stephen Marcus: gee, I’ve owned homes for 40 something years.

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Stephen Marcus: I’ve never had one burn to the ground.

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Stephen Marcus: Why should I buy insurance? Let’s say I don’t have a mortgage, so no mortgage holder is telling me I have to have it. What are the chances?

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Stephen Marcus: Well, I don’t know. It’s

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Stephen Marcus: the the reality is, we know

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Stephen Marcus: that disasters happen. Fires happen, casualties happen, and we know that

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Stephen Marcus: if you have a general contractor, and the policy specifically excludes community associations.

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Stephen Marcus: unless boards and managers follow your advice because managers

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Stephen Marcus: should not have to be. And aren’t the experts on insurance issues and the board members on

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Stephen Marcus: if it’s as simple as call your agent, and maybe they offer that service or can tell you where to go where you can get it. I think that’s you. I I that would be the biggest takeaway that I would say for the people on this call.

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Val Feeney: Yeah, yeah, and.

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Stephen Marcus: But but keep going. You’re doing great.

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Val Feeney: Yeah, no, the select, the selection of your insurance agent does matter. And you know, if you have one who’s an expert in the field that you’re, you know you fall firmly into. You want to lean into them and and your you know, your renewal selection process

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Val Feeney: matters right, not just leaving it to you know your golf, buddy, which, hey? I have plenty of people I golf with who I do their insurance, too. But the fact of. Oh, my brother-in-law! Does it? Right? So, hey? If they’re an expert? Great, and they’re offering you these services. Great, but just the way the law, the way. The litigation has just kind of had gasoline poured on it since Surfside. You can’t just assume that you’re covered anymore. You have to almost assume you’re not covered and work

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Val Feeney: backwards into it. And we’re happy to provide kind of those like checklists or kind of train the property managers as as we go but certainly an emerging risk for property managers here. There’s a lot of pitfalls even in their own coverage. But anyway.

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Stephen Marcus: You wrote A. You wrote a fascinating article on all your articles are extremely well written and and informative, and on lofty topics, but understandable

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Stephen Marcus: and I’m saying this as somebody who

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Stephen Marcus: don’t know you from Adam have never met you in person who saw an article on Linkedin started following you and said.

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Stephen Marcus: gee! I thought there were only like 6 insurance agents in New England who really knew condominium insurance.

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Stephen Marcus: this Valentine guy isn’t bad, he’s good. So do you want to go into build his risk and own his interest because.

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Val Feeney: Yeah, let’s do it.

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Stephen Marcus: I almost assure you that boards and managers and attorneys

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Stephen Marcus: for the most part, have no idea

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Stephen Marcus: what you’re talking about and what you’re looking at. So why don’t you explain.

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Val Feeney: Yeah, yep, good point. And you know, to kind of 1. 1 quick remark is, I’m a a certified bona fide insurance nerd, so I can nerd out on this stuff all day long, and you know, talk about it forever. So please keep me on task so we can get through some of the most important items you’re seeing from boards. So Builder’s risk right? What what is it? And why does it matter? That’s probably the most common question. So

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Val Feeney: builders rent. So right when you start a project, or you’re thinking about starting a project. You have your master policy, which you know likely provides property coverage to your buildings and liability for the association, your classic slip and falls and other stuff like that. But your master policy, most likely, and there’s rare exceptions, but most likely your master policy does not cover the property when it’s under renovation or construction.

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Val Feeney: Right? This is where a builder’s risk policy comes in place. A builder’s risk policy is a type of property insurance that covers the building and materials during construction or renovation. It protects things. It protects the association against things like fire, right, which is really common during construction. If you think about all the subs keeping their batteries plugged in overnight, or their tools plugged in at the location overnight. Theft?

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Val Feeney: Right? Think of like you get $100,000 of lumber and tools right on the other side of a fence vandalism or weather damage. Right, you know. Let’s say you have a windstorm or the nor’easter ripped through the project that happened while the project is underway. Think of it as a temporary property policy that applies only for the duration of the project.

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Val Feeney: You know so many boards assume that their existing master policy automatically covers construction work. But most policies exclude or limit coverage for major renovations. So the association or something, and this is probably a question to the Association, then implements a builder’s risk policy for the course of construction which then leads to another question, hey? Should the general contractor buy the builders risk policy, and

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Val Feeney: I think probably up until about 5 years ago, or I guess it depends on what agent you talk to. I think most boards would just say, oh, yeah, it’s in the cost of the Paul. It’s in the cost of the contract. The the builder is going to buy the builder’s risk policy.

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Val Feeney: I’m a firm believer that that’s not the right approach. I think the association should be the the 1st named insured the purchaser of the Builders risk policy. And here’s why.

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Val Feeney: if you’re in the middle of a project

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Val Feeney: and the entire project burns down, or there’s a major problem. Do you want the check

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Val Feeney: for the claim going to the builder who may now be underwater or owe subs a lot of money, or would you rather it go to the association and in their hand. And now you’re in control of the money. And what happens me personally, if I’m hired by the board, I’m making sure that the board buys the the builders risk. I have yet to hear a great argument for a builder owning and controlling the builders risk policy. But I am open to changing my opinion, if someone gives me one.

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Val Feeney: Alright any any questions on that, or I can just dive right into that.

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Stephen Marcus: The only question we have so

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Stephen Marcus: so far believe it or not. and maybe you’re just giving so much information that people are furiously take, take

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Stephen Marcus: taking notes, or whatever which I think might be the case, I think this is excellent. The only question we have so far is sort of an odd one from an anonymous attendee how how to handle contractors who only hire workers that don’t speak English, and I can give the easy answer without getting into politics or anything else.

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Stephen Marcus: Well, call the contractor who does speak English, and I’m assuming the the person asking the question is either a manager or a board member, and has the right to do that because we don’t want unit owners calling you contractors.

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Stephen Marcus: it’s aggravating and disruptive. So, anyway, go on.

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Val Feeney: Yep, yeah, that’s slightly outside of the insurance. But I would say, you know, a key to running a massive renovation is a strong communication, and if you have a broken barrier from the jump, probably not ideal. But I you know I digress so something to think about. But some of the best subcontractors I’ve ever seen.

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Val Feeney: Don’t! Don’t speak English as their 1st language, so don’t discount it. I think whoever’s just running the project and the people at the top who are most involved with the communication. They need to have thorough communication with each other. And that’s you know, that’s probably for the Board’s project manager or their, you know, property manager.

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Stephen Marcus: And and there are great workers for contractors.

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Val Feeney: Yep.

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Stephen Marcus: Who don’t speak English, and I’m guessing

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Stephen Marcus: the contractor. The workers probably speak some English and another language.

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Stephen Marcus: I don’t know about anybody else, but

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Stephen Marcus: I keep taking courses every year on English as a 1st language.

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Stephen Marcus: so the fact that somebody else knows suit 2 languages that probably a whole lot smarter than I am. So, anyway, continue.

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Val Feeney: I’m in the same boat, and probably not an idea. Listen. You want to be very transparent and thorough, and and people are friendly, and people want to talk to workers. But when it comes to like decisions and actually talking to the workers about things that are kind of important to the Association, probably not ideal to have the unit orders out there asking questions and doing that. But hey, people are friendly, and you know, I talk to people who are working on my street when I’m walking my dog. So to each their own. But anyways, I digress.

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Stephen Marcus: Okay, I I yeah, I think that adequately answers that question. Let’s get, let’s get back to the slides.

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Val Feeney: Yeah, yeah.

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Jake Marcus: We? I think we wanted to discuss also how Builder’s risk plays at the owner’s interest.

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Val Feeney: Yes, great, great question. So oftentimes the builder’s risk will have coverage for the property.

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Val Feeney: the building while it’s under renovation, and oftentimes it might have it should have general liability with it as well. So if any anything happens on the property during construction that that happens, and it’s quirky.

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Val Feeney: You know, that’s good to have, even though you’ve kind of transferred that risk to the general contractor, and that’s all great. But another option that’s become popular, and I tend to recommend it when there’s a lot of money on the line is an owner’s interest policy.

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Val Feeney: It’s what I consider is kind of like the overlooked

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Val Feeney: complement to your builder’s risk, general liability, and what the general contractor has, it basically fills the gap.

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Val Feeney: So the owner’s interest policy is a liability policy designed for the Condo Association itself. It protects the owner, which is the Association. Think of it as like the project owner, which is the association. If the contractor’s liability insurance fails or doesn’t fully respond. Okay, so an example.

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Val Feeney: a subcontractor injures somebody

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Val Feeney: or one of you know, there’s an injury on the on the on the property, or the subcontractor injures someone at the association, or a guest, or, you know, a Amazon driver, but their coverage lapses midterm.

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Val Feeney: and it goes, it kicks up to the general contractor. But what happens if if there’s an injury? If there’s a major issue is nowadays, and and Steven and Jake can speak to this. The attorney is going to sue everybody.

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Val Feeney: They’re not going to just pick on the general contractor. They’re going to sue the sub. They’re going to sue the general contractor, and they’re going to sue the association, and they’re probably going to sue the property manager.

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Val Feeney: What happens is then, is all those entities basically have to rush to show proof that they’re indemnified and covered by another person’s insurance which can take time, or they have to defend themselves until it comes into a time in the lawsuit that they then fall in line behind. Whoever’s insurance is going to protect them.

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Val Feeney: however, who picks up that defense cost. How long does that take? And you know, are you fully, you know? Are you fully covered for the defense, or are you not so for large projects with multiple contractors or high risk work, like structural repairs or primes. You know, those are prime situations

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Val Feeney: where the owner’s interest should be considered because it’s basically your prepaid defense. If the proverbial dirt hits the fan and the Gc’s insurance, the subs insurance are slow or don’t fully respond, which is far more common than we would all like on these type of situations. So

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Val Feeney: that kind of leads me into what right? So who should carry what

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Val Feeney: builder’s risk usually purchased by the project owner, which is the association, or sometimes the general contractor. I prefer the association. Whoever buys the builder’s risk needs to make sure that all parties you know the the Association, the Gc. Are named appropriately on the policy

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Val Feeney: owner’s interest is always purchased by the Association. The Gc. Doesn’t care about the owner’s interest. They have their own insurance. The owner’s interest is always for the association, and it’s always for their benefit. Only that’s it, all right. So you know, that’s kind of the breakdown owner’s interest. It’s just it’s your your last line of defense. If something really goes bad on the project. Usually they cost, and I’m going to ballpark here for New England.

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Val Feeney: They’ll run the association about 4,500 bucks, maybe 45 4,000 to 7,000, let’s call it. If you’re spending 8 million dollars on a project.

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Val Feeney: I would like to believe that you can budget for $5,000 for a defense policy. If the proverbial dirt hits the fan, it’s it’s super conservative. I get that. But I’ve worked enough projects, and I’ve seen enough claims where an association will say, Val. I thought we were covered by our own liability and or the general contractor’s liability insurance, and the answer is.

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Val Feeney: you are for most claims, but not all. And there’s a lot of situations that can change that by your prepaid defense to defend you guys. If the proverbial dirt hits the fan, and that in a nutshell is an owner’s interest. Policy.

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Stephen Marcus: It it and on the cost to make it even

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Stephen Marcus: reducing it down to the ridiculous

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Stephen Marcus: associations on 8 million dollars typically would go for an association loan. I’m going to miss some of the bank, I’m sure. But South Shore Bank Dan Peaker, Brookline Bank used to be West Blair. I think he might be doing a little bit, but it’s sort of retired, semi-retired, at least so North Shore Bank, Rockland Trust. If you get a 25 year loan.

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Stephen Marcus: and people could, so that people can afford it because they can’t afford a $80,000 special assessment

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Stephen Marcus: upfront due within 30 days, and you can pay it over 25 years. The 4 to $7,000 sounds even more silly because spread over 25 years. We’re talking about nickels and dimes, tops.

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Val Feeney: And it really.

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Stephen Marcus: Keep keep going. I keep interrupting.

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Val Feeney: Yeah, it’s okay.

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Stephen Marcus: And and you’re way behind. You have a lot of slides to get. And I think this is

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Stephen Marcus: amazing. I I am not sure, especially on the bill, is risk and owners interest. That I’ve heard a conversation with this directed to managers and board members and as I said.

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Stephen Marcus: managers are not licensed insurance agents and not supposed to be. They’re supposed to be able to call you or somebody else the the trusted agent. So you’re giving them the questions that the they should be asking in the services that they can get. So keep going.

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Val Feeney: Yep, and keep in mind. Like to kind of, you know. Pull that all together is the builders risk and the owner’s interest. Policies are only for the duration of the project. Right? These aren’t. You don’t need them forever. It’s strictly for when kind of the 1st people hit the ground, and once you kind of get that, see? You know the CEO or the CEO, the occupancy permit after the fact. Then you revert back to your master policy which I think we’re going to cover in a couple of minutes.

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Val Feeney: All right. Next is the owner coverage, right? So excuse me. The umbrella coverage. So this is kind of back to your association’s insurance coverage, and we can talk about kind of the general contractor, too. But I think most people are like, hey? Does our association need an umbrella? And why? And I would say, it’s imperative these days. And here’s why your umbrella policy, if it’s built correctly, will go over. When I say, go over, think about I’ll talk about an auto lawsuit real quick.

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Val Feeney: and I’ll make it even easier. Think about your personal auto

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Val Feeney: on your personal auto. You have $250,000 in liability coverage.

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Val Feeney: You are using your cell phone driving down the street. You’re texting, not paying attention. You hit a pedestrian, and you really injure them. You severely injured them. Something we see every week that $250,000 in your auto policy will quickly be exhausted, and the insurance company will say, Hey, Mr. Feeney, we’ve paid

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Val Feeney: the $250,000 you purchased from us to the injured party. You’re on the hook for the rest. Good luck! Right? So what do I do then? If I have no coverage, I’m probably going to go bankrupt if I have an umbrella.

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Val Feeney: That’s when an umbrella kicks in and covers up to its limits the rest of the claim. So an umbrella policy protects everyone’s like kind of behind in a worst case scenario. So that’s what an umbrella kind of is. Right. So umbrella is actually can also be a commercial policy, which again, it can be called an excess policy or umbrella. They’re slightly different. But for the sake of conversation let’s assume they’re the same.

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Val Feeney: So your association will have an umbrella right? So they’ll either have a 1 million dollars umbrella, which in today’s environment, especially in New England, is too low. They’ll have a 3 million, a 5,000,01020, 25, 5,100, depending on how big you are.

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Val Feeney: it will sit over. If it’s built correctly. Your dno coverage, your commercial general liability

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Val Feeney: over your non owned and hired auto exposure, which is anyone driving on the Association’s behalf. Running errands. Think of it! Maybe, like you have a doorman, and he runs down and gets coffees for the board meeting, and he gets in a major accident. So the umbrella coverage is extra liability protection that sits on top of those policies it kicks in when a claim exceeds those limits of the primary policies

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Val Feeney: for boards. This matters because lawsuits for major projects can be catastrophic, right, multi-million dollar injury claims or lawsuits alleging mismanagement by the board are not uncommon, and that’s kind of where the Dno kicks in on projects.

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Val Feeney: And why it’s critical during major projects is capital projects. Introduce more people, more equipment and potential hazards to your property and more exposure basically means more ways. A large claim can happen.

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Val Feeney: So if your board is approving multimillion dollar work, your umbrella should reflect that level of risk, a 1 million dollars umbrella might have been fine for routine operations, but not for a 3 million dollars. Structural project. So starting point, if you have a large project. You probably want to go to 3 million, if not 5 and many associations now, especially with high rise buildings or large projects. They’re going higher. They’re going 10 million, especially in urban areas where claims costs are higher.

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Val Feeney: So your limits should be reviewed with both your insurance advisor and your attorney, who’s, you know, setting up contracts for you

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Val Feeney: the right number. It really depends on your assets. Project scope and kind of risk tolerance. And then that kind of ties into one more thing. It’s like the coverage gaps. Right? So when I say before this, if constructed properly, a lot of them aren’t constructed properly, okay, not. Every umbrella automatically sits over your

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Val Feeney: dno. Some only will go over your gl and your auto. Some won’t go over workers. Comp. Right? You need to confirm this with this your agent. It’s got to be listed on the umbrella.

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Val Feeney: So common kind of pitfalls for boards to avoid assuming the umbrella limits are one size fits all. They’re not forgetting to review your umbrella placement after capital improvements, the builders, the building’s risk profile might have changed and not confirming the umbrella covers all the entities involved in any any type of situation so practical. Takeaway

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Val Feeney: umbrella insurance is relatively inexpensive compared to the protection it provides. The cost of adding, like 5 million on top of what you currently have is a fraction of what even one major claim cost could could or one major claim could cost. So get it. Get it. Have that discussion with your agent. Let’s see if if we want to. Kind of if we’re going to hold it just to the hour you we can kind of pick what what we think.

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Stephen Marcus: We. We usually

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Stephen Marcus: go over mainly because I asked too many questions. I don’t know when to shut up, so keep talking

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Stephen Marcus: all right.

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Stephen Marcus: So before we finish, I I have one that’s important to me.

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Val Feeney: Okay.

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Stephen Marcus: Or at least to know on the answer. Okay, how do we ensure

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Stephen Marcus: ENSU. RA.

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Stephen Marcus: That we get notice of cancellation of the contractor’s policy.

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Val Feeney: Great question.

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Stephen Marcus: I know if we’re a lender we can be a lost payee with lender lost payable provisions.

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Stephen Marcus: Yeah, but but we’re not lenders. It’s the contract.

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Val Feeney: So.

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Stephen Marcus: And and I know on some you said the association buys the policies, and that that’s easy. But how about the contractor’s own policy? We want to know if it’s canceled.

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Val Feeney: Correct. So there’s a few scenarios. One is, if you rely on the contractor’s policy endorsement. That says he has blanket additional insured status to anyone who requires it by contract. You won’t know, because you won’t be listed on the policy. The blanket AI endorsement blanket, additional insured endorsement will cover you as long as it’s in the contract. The only way to really

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Val Feeney: be alerted is, if you’re actually listed as a scheduled additional insured on the policy which can be requested. I don’t think it’s overly unique.

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Val Feeney: I think the way blanket AI endorsements were created to was to prevent, you know, agents and underwriters having to list, you know, 200 people on a policy, and it makes life easier for everybody. But it doesn’t alert you when a policy is canceled so

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Val Feeney: Either the practical solution is to force the Gc. To list you on a scheduled AI endorsement, or the other kind of layman’s term approach is just to hound them every so often for their cert.

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Stephen Marcus: But but there could be kickback.

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Val Feeney: Yep.

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Stephen Marcus: From the from the contractors, carrier from the contract, from somebody.

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Val Feeney: It’s gonna cost. It’s gonna cost the contractor another 100 to 150 bucks on their policy to schedule you as an additional insured. They may not like that. Their agent might not like it. There might be some push back, and I guess the question or the the question they have to answer is, you know. Why? Why don’t you want us to know? If it’s just other than cost? You know. But that’s that’s a great question. I really haven’t heard that which I love.

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Stephen Marcus: And and I haven’t heard, because I don’t think maybe it doesn’t exist. I haven’t heard the

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Stephen Marcus: perfect answer, but on what you said that comes

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Stephen Marcus: very close, because if it’s solely an issue with the carrier and the contractor 100 50 bucks.

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Stephen Marcus: if we were the attorneys we happen to charge a little more than $150 an hour.

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Stephen Marcus: Better pay the 100 have the association, pay the $150. The contract is happy. You get notice of cancellation, and life is good.

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Val Feeney: Yeah. And hopefully, an issue you don’t run into too often. I’d like to believe a general contractor who’s running an 8 million dollar project isn’t going to allow their insurance to expire or be canceled, but that kind of falls back on, if I’m being honest, probably falls back on the project manager or the property manager who’s handling the construction project themselves on how

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Val Feeney: how much they want to be a pest to the insurance agent for the Gc. Which, you know, we insure a lot of general contractors. We probably get upwards to a thousand cert requests a day, and it just is what it is. And we provide.

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Val Feeney: Yeah, so I guess.

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Val Feeney: But.

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Stephen Marcus: But but if a manager has to call

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Stephen Marcus: the insurance agent for the contractor

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Stephen Marcus: once a month, once once a day, 10 times.

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Stephen Marcus: Yeah, yeah, they they should be charging for it. They should be charging the Association

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Stephen Marcus: for that work as part of the work that they’re doing on the oversight.

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Stephen Marcus: Because it’s like it’s it’s more to do it right. It’s more, it’s it’s more time

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Stephen Marcus: you are enlightening.

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Stephen Marcus: I’m not sure about anybody else. But I assume everybody. But you’re certainly enlightening, enlightening me on a lot of topics that

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Stephen Marcus: now we know to ask questions. But I I detracted you again with the cancellation question, so I’m glad you never heard it before, or you don’t hear it often. But you can continue on. Sorry it’s 2 o’clock. Anybody who wants to

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Stephen Marcus: hang around. I know some of you might have to leave you will get a copy of the the recording, but usually, if we go another 10 min, and anybody’s interested in

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Stephen Marcus: hearing more about what maybe we all didn’t know. Either stay on or wait till Monday or Tuesday to get the recording. Keep it, keep going.

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Jake Marcus: Let’s let’s do this. Let’s go through summary and best practices, and then for extra credit, you can stay after class for the workers. Comp replacement and reconstruction, cost, insurance and cost, escalation and market forces that we discussed. But for now we can do a summary and best practices for those that may need to leave early.

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Stephen Marcus: But before I leave, can you tell me what I’ll get for the extra cover.

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Jake Marcus: You get 5 extra points on your final exam.

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Stephen Marcus: Okay. Go.

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Val Feeney: Yeah, great, you know. Great idea, you know, I think. Hey, you know, we’ve covered a lot, and insurance can be can be super boring. I’ve been told that I do make insurance make sense, and I love it so I’m excited. But we’ve covered a lot from contractors insurance to builder’s risk

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Val Feeney: umbrella coverage, you know, workers Comp, which we’ll touch on. But I don’t want to make it, you know, brain brain surgery and replacement cost coverage for your building, which I do think is important. The big theme is. These exposures can be managed if you know where to look for where to look for them, and if you can ask the right questions early, right? So every capital project should have a simple insurance checklist.

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Val Feeney: You know, confirm required coverages for all contractors, and that they’re going to be

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Val Feeney: passing those same requirements down to their subs. What I mean is, if you’re requiring a contractor to have 10 million dollars in gl coverage. He shouldn’t then turn around. He or she should then not turn around, and only require 1 million dollar umbrella for all their subs. It should be pretty uniform, which Us. Insurance people kind of can’t stand, because there’s an argument to be made that everyone’s just making their coverage higher and higher and higher. It’s impossible. But you don’t care about that as a board. You’re you’re in the business of protecting yourself.

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Val Feeney: you want to verify limits and endorsements. Right? I talked about those pesky endorsements. Are you truly an AI on the contractor’s policy? Do they have a waiver of subrogation? Do they have coverage for residential condo associations you want to review, do you? Are you going to buy your builder’s risk? And is the owner’s interest policy worth it for you guys during this project and what the options are.

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Val Feeney: you want to update replacement cost appraisals and policy limits? You know, the builders risk policy. Is it the proper amount of coverage after the project’s done. Are you increasing your property coverage on your master policy? If you just put 8 million dollars now, maybe half. It’s labor. But if you just put 4 million dollars into your building, you can’t then just keep your building coverage the same on your master policy that doesn’t make sense.

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Val Feeney: You want to align your umbrella coverage with the with kind of the projects, risk profile. And so then these checklists become part of your project planning just like budgets and timelines.

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Val Feeney: you want to engage professionals super early. I love. When people call me. They’re like, Hey, we’re kicking the tires on a project next year like love. That right? The most common kind of mistakes I see happen because boards involve their insurance advisor too late, and then they are reactive. Right? The contracts already signed. Hey? We just signed a contract to do a 10 million dollars project. Here are the insurance requirements.

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Val Feeney: Oh, great, right like that doesn’t really help, you know. You want to bring experts in during the planning so they can spot gaps before they become problems.

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Val Feeney: You know, set expectations with the general contractor and how they’re going to handle subs and even set expectations with unit owners. Right? You really got to be upfront and transparent with how it’s all gonna go down, and how often they’re going to hear from you. On up with updates, right? How often are you going to update the association and all the unit owners that avoids confusion, it avoids delays, and it avoids finger pointing. If something goes wrong, right.

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Val Feeney: So major projects are a perfect time to reset your insurance program even after the work is complete. Revisit your policies. Replacement costs umbrella and liability exposures those all shift when the building’s value increases significantly. And then, you know, finally I would say, we covered a lot of ground, you know, if you’re feeling overwhelmed. And you’re like, Gosh, we’re going to do a project, and this sounds like a nightmare. Don’t worry right like

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Val Feeney: you know, the goal isn’t for you to become an insurance expert. The goal is for you to know what questions to ask and when to involve the experts. I’m always happy to talk through specifics after the session, you know. Sometimes a 5 or 10 min phone call is all it takes to confirm. You’re on the right track and to kind of calm your fears so. You know.

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Val Feeney: Look up, find me on Linkedin. You’ll see my cell phone number call me whenever you want, and I’m happy to happy to talk with people about stuff.

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Jake Marcus: There’s some of the contact info as well. But if we want to get to.

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Jake Marcus: I mean, we can probably get a quick rundown.

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Stephen Marcus: Let me just make a 20 second comment on cost escalation.

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Stephen Marcus: So we talked about the tragic

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Stephen Marcus: earthquake and tsunami at the beginning of this.

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Stephen Marcus: And what does that do to construction costs?

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Stephen Marcus: We have in here tariffs in 2024.

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Stephen Marcus: The

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Stephen Marcus: I can’t imagine any Condominium Association or anybody else in the world was talking about. Well, how do we deal with 15 or 50% tariffs because it didn’t exist as what was going on in the world.

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Stephen Marcus: But but it happens you just have to. Be careful, because the the costs do do in doing increase. But.

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Val Feeney: Yeah, you know, I I think. It’s probably the the number one issue I see when I get brought into a board right? They’ll call me for something that’s usually.

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Val Feeney: you know, fairly straightforward, like, hey? Our renewals in 3 months, you know our agents telling us you know, the the policy we have is the best one. But it, you know, it’s got a huge increase on it. We’re just not feeling they’re doing a good enough job, or whatever the reason may be, they bring me in. One of the 1st things I see is, the building coverage is never enough. Right? So you know.

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Val Feeney: most boards rely on outdated numbers from their original construction, or from generic estimates.

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Val Feeney: you know, the construction costs and tariffs have absolutely construction costs mainly construction costs since 2020 have multiplied in a factor of I don’t know. 2, 3, 4, just.

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Val Feeney: you know, if you used to insure your building for 5 million in 2024, and it hasn’t increased significantly. You’re not in a great spot. If there’s a total loss, insurance carriers are scrutinizing this number more closely than ever. If your building is insured for 10 million, but costs 15 million to rebuild.

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Val Feeney: you won’t have enough coverage in a total loss, and you’ll also get penalized by the policy language that says you have to be insured for the full value for all the coverage to kick in. So you know, major projects are the perfect time to reassess these values. You already have contractors and cost estimates on hand. It’s a great time to review it all, and one thing that I’ve started to introduce.

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Val Feeney: because oftentimes our clients rely on us for replacement costs. And yeah, I feel like I’m pretty good with. You know what a number should be, or a ballpark. But, to be honest.

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Val Feeney: there’s such a large sliding scale between like a high end. Condo on ultra high end, condo, or your kind of regular run of the mill. Really nice condo condo that you can make the argument to slide that scale between $400 per square foot, and like 1,200 in the snap of a finger. And I’m not a construction expert. So what we’ve been kind of starting to lean on or advise condo associations is go ahead and get an independent appraisal.

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Val Feeney: Get a professional valuation that factors in labor materials and like today’s pricing. And I’m not looking to spend my clients money, but I think it’s a very well I think it’s something to spend. It’s a good thing to spend money on to get a baseline of where you are today. Because if I was saying, Yeah, go ahead.

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Stephen Marcus: But legally and I apologize again legally.

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Stephen Marcus: except if there’s this unique category of special relationship with the agent which I don’t know what it means. That’s your brother-in-law.

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Stephen Marcus: The insurer

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Stephen Marcus: and the agent are not guarantors of the stated limits of the policy. So if you have a policy

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Stephen Marcus: for 30 million, and it goes down, and it’s 50 million to rebuild.

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Stephen Marcus: 1st thing the association will do is call the agent.

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Stephen Marcus: Call the attorney Sue the let’s sue the carrier. Let’s sue everybody.

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Stephen Marcus: And the answer, to put it in very simplistic terms, and not to dismiss the talents of the insurance advisors is.

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Stephen Marcus: Listen, it’s like this is more judge saying, than than an insurance agent.

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Stephen Marcus: It’s like Mcdonald’s you. You wanted 30 million dollars of insurance. We gave you 30 million. If you had asked us and bought 50 million

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Stephen Marcus: we would have done that.

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Stephen Marcus: But we have no better idea than anybody else.

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Stephen Marcus: We’re we’re not experts at the cost of construction. So I wish that every association in the country

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Stephen Marcus: would get an independent insurance replacement or reconstruction cost appraisal. I’m going to keep saying it. I’ve been saying it for a few years. Not many people, not as many people, are doing it as I think should just go ahead. Sorry.

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Val Feeney: Yeah. And I do think it’s I would classify it as not really emerging. It’s fully emerged. But but it’s not something that many agents are doing. And, to be honest, it’s a bit of a cya for me, right like if I go like, I said, I’m not a reconstruction specialist. So when I go into condo, I have tools that I can use from the insurance industry that might give me a general idea.

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Val Feeney: But to your point, I would say, out of the you know, the 50 insurance companies I work with on large properties.

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Val Feeney: less than half actually are going to come back and say, Hey, we think that’s a little low. Most of them are like, you tell us what you want for building coverage, and we’ll give it to you. And then what’s the code? And then they’ll have a coinsurance clause. So I what I think is the best, you know. Approach is.

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Val Feeney: get that appraisal, and I haven’t really figured out how often is the right number yet. It’s kind of a feel I’m guessing. Probably once every 5 years would be sufficient for now, and I listen. I can. You can convince me otherwise. But like, get that 1st one, I think, getting that 1st one and then reviewing it with the board, and your insurance agent will really go a long way, because then you can keep at least you can get a general idea if you keep.

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Val Feeney: If you look back at a yearly basis and look at like inflation costs. And Cpi, you can probably be pretty close. Yeah.

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Stephen Marcus: Increases on the increases in the cost of lumber, or whatever it might be.

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Val Feeney: Yeah, whatever you want to use. But I think right now we’re in a bit of a a bit of a conundrum or Wild Wild West, where, since 2020,

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Val Feeney: I don’t know how much buildings have increased in cost. I know it’s significant. I know the vast majority of my boards, every renewal I’m like, should we consider increasing by 20%, should we? What? What’s right? What’s the right feel? Most boards agree? And you know, they’re like we should do something we probably shouldn’t stay stagnant. And and because the vast majority of boards and I agree that we shouldn’t stay stagnant, that’s enough reason to justify getting an appraisal.

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Stephen Marcus: Good. Could you also confirm that

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Stephen Marcus: guaranteed true guaranteed replacement, cost insurance, which

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Stephen Marcus: rebuilds the building for whatever it costs, has become

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01:14:41.370 –> 01:14:46.070
Stephen Marcus: much more difficult to obtain? Or is it even obtained.

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01:14:46.070 –> 01:14:56.200
Val Feeney: That’s gone, that that’s gone. That’s no longer the case. So when I bought my when I 1st started, when I 1st started in insurance. I was a personal lines agent. So home auto, you know, umbrella.

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01:14:56.340 –> 01:15:21.199
Val Feeney: all the best homeowners, insurance carriers included guarantee replacement costs. So if your house burned down, and at the time they 1st issued your policy it was insured to 100% full value, based on their calculations forever. They would do guarantee replacement costs meaning if there was a large hurricane and there was a spike in supply and labor. So your house wasn’t going to be built for the same amount you had insured for is going to be 50% higher because they had guaranteed replacement

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01:15:21.200 –> 01:15:38.820
Val Feeney: cost on the policy they were going to rebuild it, no matter what the cost. Then what happened is during 2020 and the Covid and the inflation spike. They started getting burned on that. So they pulled that all back, you don’t see that anymore. So now, there’s a few different things. Typically, you want to see

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01:15:38.820 –> 01:15:45.380
Val Feeney: 2 things on your policy, or one of 2 things. One is you don’t want to see any coinsurance clause.

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01:15:45.380 –> 01:16:07.969
Val Feeney: especially 100% man, 100% has some teeth to it. That means if you’re not fully insured to what we decide at a total loss. We’re going to penalize you. Right? So you, if you have to have coinsurance, you want it at 80%. Which gives you that 20% wiggle room to be within, or, what is more, common, is agreed value. So that basically protects the insurance company, saying, Hey.

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01:16:07.970 –> 01:16:26.549
Val Feeney: you tell us what you think it should be insured for, or what you want to insure it for, and we’ll say agreed value, which completely wipes out the coinsurance. And that’s your Max amount available for the building at a time of a total loss. So most I would say pretty much. Everybody with I should say, everybody. That’s a bad, that’s I should never say that

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01:16:26.670 –> 01:16:34.459
Val Feeney: in a perfect scenario, if you have a very strong, if your insurability is strong and you have a good risk profile. You’re an agreed value.

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01:16:34.510 –> 01:16:53.730
Val Feeney: Oftentimes buildings down in Florida or risky areas, or they have claims in the past. They don’t have that. They’re not able to get agreed value. They’re going to be stuck with something between 80%, 90% or 100% coinsurance clause which then further justifies getting that appraisal. Because if there’s a large loss.

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01:16:53.730 –> 01:17:06.170
Val Feeney: you bet your ass the insurance company is going to use that coinsurance clause, because in the policy it’s not in the policy for you. It’s in the policy for the insurance company ran by attorneys to defend the insurance company. That gets all I’ll say about that.

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01:17:06.995 –> 01:17:14.429
Stephen Marcus: And not to totally mess you up. But I I can’t, can’t, can’t leave

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01:17:14.750 –> 01:17:23.529
Stephen Marcus: insurance appraisals and all that without giving you the the opportunity to say a word or 2 on ordinance of law coverage.

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01:17:24.250 –> 01:17:30.590
Val Feeney: Yes, ordinance or law coverage. Huge. Not actually.

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01:17:30.890 –> 01:17:47.649
Val Feeney: I don’t really see it overlooked as much as you would think, but oftentimes it’s too low. And so basically, the the core summary of ordinance of law coverage is, if you own an association built in Boston, and that was built in 1810,

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01:17:47.860 –> 01:18:14.270
Val Feeney: and it completely burns to the ground. The building is going to cost much more to replace than you believe, because updating to code, right? So instead of, you know, 5, th 60 amp. It’s going to need 200 amp. It might need an elevator. It might need more, a different electrical, different Hvac. Different plumbing handicap, accessible, all sorts of stuff

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01:18:14.270 –> 01:18:28.370
Val Feeney: that is right to do, but also comes at an increased cost of construction. The insurance company is not in the business of adding that for free, it’s a coverage that you need to have on your policy

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01:18:28.370 –> 01:18:56.760
Val Feeney: most times on large projects. Excuse me, large policies. You’ll see a 500 K or a million dollars thrown in. There’s different coverages, A, B and CI won’t get into the difference. But one of the big pieces of it, too, is what if the building’s partially destroyed, and the city, or a local municipality says you have to completely tear it down? The insurance company is also not in the business of demoing your building when it’s only partially destroyed.

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01:18:56.760 –> 01:19:03.719
Val Feeney: So ordinance of law also covers that exposure, if built correctly, so extremely important, and not to be overlooked.

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01:19:04.942 –> 01:19:07.169
Stephen Marcus: And we’re not doing justice to any of these times.

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01:19:07.170 –> 01:19:09.490
Val Feeney: No, no, no, no! I I mean

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01:19:09.490 –> 01:19:11.540
Val Feeney: that so fast and quick that.

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01:19:11.540 –> 01:19:35.689
Stephen Marcus: No, no, it was a great, it’s a great answer. But you said on Linkedin, and maybe you can shout it out that. Or maybe it’s on one of the slides that, people can call your cell phone 24, 7 so I’m thinking of calling Saturday at midnight. but people can call you.

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01:19:35.920 –> 01:19:38.430
Stephen Marcus: I I assume you’re willing to answer questions.

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01:19:38.630 –> 01:20:07.570
Val Feeney: Yeah, absolutely. Listen. Like, you know, part of my job is to be a consultant. I take a very consultative approach to to pro. You know, clients and friends and family and people who saw my stuff on Linkedin. I get called pretty much every week with someone asking a question, and happy to do so. Of course I’m not, gonna you know. Answer, you’re not gonna answer your questions for an hour. If you’re not a client. But I’ll definitely give you the nitty gritty over 10 or 15 min of a phone call

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01:20:07.960 –> 01:20:14.200
Val Feeney: happy to do so. You know, for from a workers cops com standpoint, you know.

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01:20:14.250 –> 01:20:26.649
Val Feeney: I’ll say a few things, but I also want to mention. One thing in particular is, you know, hey? When when you’re looking at the contractors and the general contractors. Insurance obviously want to verify that their workers. Comp coverage is in place.

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01:20:26.700 –> 01:20:54.890
Val Feeney: and you want to make sure that there are steps in place that he that the contractors, verifying all the subcontractors, workers, comp as well. Your project manager, can also look up every sub. If you got a list of subs from the contractor before the project. They can look up every single one of those contractors subcontractors, and they can also look up their what we call MoD, their expense. You know experience modifier, which essentially is.

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01:20:54.890 –> 01:21:16.300
Val Feeney: if they have large claims or a lot of claims in the past, the number will reflect that that’s probably a topic for a different day. But just know that you can find out if a subcontractor has a lot of injuries on the job site, and you can certainly take it upon yourself to research that the one thing I do want to mention is most associations. Putting the projects to the side for a minute.

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01:21:16.500 –> 01:21:29.399
Val Feeney: Most large condo associations do not have their own workers comp coverage because they, the way they look at it is they don’t have any employees, and they outsource everything to the property manager.

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01:21:29.580 –> 01:21:40.819
Val Feeney: What I’ve seen or what I’ve been become a fan of is an association can put a small workers comp policy in place that’s insignificant in cost that covers you. Basically.

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01:21:40.820 –> 01:22:03.710
Val Feeney: if anyone comes on your property to work and they don’t have coverage. You’re not responsible if they get, you know, the board’s not going to be exposed if they get hurt. You have, like a basically a base workers comp policy in place to protect you against any unit owner having, like a painter or a plumber, come in which is standard operating procedure. And if they get hurt because the association

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01:22:03.820 –> 01:22:22.290
Val Feeney: it’s hard for them to force unit owners to be requiring insurance search for workers Comp from a plumber when they have a leaky faucet or a leaky toilet at, you know, or their heat’s not working at 6 Am. On a Sunday morning. So I am a strong proponent of large associations heck even small ones.

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01:22:22.290 –> 01:22:38.430
Val Feeney: But I’m picking on large ones. Have your own workers. Comp. Policy. It kind of is like the owner’s interest policy. But for workers. Comp, it just protects you. If something really quirky happens to someone, the association or a unit owner hired to come on your property and do work.

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01:22:38.817 –> 01:22:52.760
Stephen Marcus: There’s 1 question that I think is important. Even if it’s that the person should call you and you give the cell phone number. The question is, can you recommend an independent insurance replacement? Cost appreciation.

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01:22:54.271 –> 01:23:16.749
Val Feeney: This is something that I would love to lean on this. You know our our networking friends at the various associations were involved with I’m not gonna give anyone’s name off the top of my head here because it is a newer it is a newer trend for me. And I haven’t really found someone that I just think is amazing yet. So I’ll you know.

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01:23:16.750 –> 01:23:25.610
Stephen Marcus: Tough time with other also very good agents. I have one person who gave me

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01:23:25.840 –> 01:23:41.959
Stephen Marcus: 2 names, but one was sort of like a solo, but claims he’s the only license insurance replacement cost appraiser. But in New England, and then there’s a company in Canada. But I’m not getting great answers either.

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01:23:42.120 –> 01:23:42.770
Val Feeney: Yeah.

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01:23:43.230 –> 01:23:51.550
Val Feeney: yeah, so that’s good. That’s kind of a wrap on the workers. Comp, and then we can, we can finish up with anything you guys think is relevant, Jake, if you kind of want to take a peek at the other slides.

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01:23:52.031 –> 01:23:57.820
Jake Marcus: No, I think that kind of cover, I mean with the workers. Comp, too. It’s yeah. That’s that’s an important one that we’ve.

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01:23:57.960 –> 01:24:25.359
Jake Marcus: I’ve heard of examples recently of people or contractors were brought in to do work, and specifically as to unit owner work that might delve into a common area. Something goes wrong. And it’s it can be a lot to unravel. So just an important area to kind of note that can go under the radar. But we unpacked a lot. Dno. I think the

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01:24:25.470 –> 01:24:43.119
Jake Marcus: the spotlight being on board members at this point. Is causing that to be a as Val mentioned, a necessity, having dno coverage as a board member. Is really needed. I just realized my name spelled Jack. Here, too.

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01:24:44.380 –> 01:24:51.679
Jake Marcus: My name is Jake. By the way. But that’s our. This is our contact info. If if

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01:24:51.680 –> 01:24:52.080
Jake Marcus: perfect.

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01:24:52.080 –> 01:25:07.080
Jake Marcus: you wanna kind of follow up happy to kind of discuss these these areas a little more or a lot more and and value where wealth of knowledge today helped out a lot in this. What we consider to be an advanced session.

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01:25:07.655 –> 01:25:09.750
Jake Marcus: This nitty gritty.

436
01:25:09.750 –> 01:25:15.770
Stephen Marcus: Well, if if you’re willing to give out your cell phone number because it’s not listed there.

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01:25:15.950 –> 01:25:18.320
Stephen Marcus: Yeah, I’ll give out. I’ll give out mine.

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01:25:18.710 –> 01:25:45.579
Val Feeney: Yeah, absolutely. I hey, I’m an insurance advisor, and I’m but hey, I’m also I I joke with people, too. When we have long conversations at the end I say, Well, hey! You also forget that I am in charge of sales for my office. So do you need a new agent. So my cell phone numbers, my cell phone number is (857) 383-0558. And you can call me anytime. And if I don’t pick up, I’ll get back to you.

439
01:25:46.380 –> 01:25:56.930
Stephen Marcus: And and mine is (781) 413-5226, and because

440
01:25:57.860 –> 01:26:02.239
Stephen Marcus: I’m not as succinct as Val.

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01:26:02.420 –> 01:26:09.899
Stephen Marcus: My his 15 min for me. I have to get 45, because it just takes me that much longer to spit things out.

442
01:26:10.430 –> 01:26:12.205
Stephen Marcus: But but but but

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01:26:13.480 –> 01:26:22.639
Stephen Marcus: I personally found this could be amaze. Amazing. I hope that

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01:26:22.840 –> 01:26:32.670
Stephen Marcus: I’m gonna re-listen to the recording. I hope that those who attended or signed up do do the same, because I think

445
01:26:33.650 –> 01:26:43.749
Stephen Marcus: there was an excessive amount of information that we crammed. We fell crammed.

446
01:26:43.790 –> 01:27:13.729
Stephen Marcus: despite my interruptions, into an hour and 26 min but with a million questions I would think that are that are left. So if you you need the the 15 min of fame with Val to to clarify an issue that he spoke about today. give give him a call re-listen to the

447
01:27:14.553 –> 01:27:23.279
Stephen Marcus: to the recording. I think the good news is is that the boards and managers do not have to be experts

448
01:27:24.100 –> 01:27:32.159
Stephen Marcus: on any of this, that there’s a required license to be a property and casualty insurance person.

449
01:27:32.320 –> 01:27:42.930
Stephen Marcus: and then more expertise for community association condominium insurance people just like

450
01:27:43.130 –> 01:27:55.290
Stephen Marcus: calling in your engineer or your Cpa. Or your lawyer. A beautiful answer to almost everything you said was.

451
01:27:55.420 –> 01:27:59.550
Stephen Marcus: if they call their agent, and it’s a decent agent.

452
01:28:00.310 –> 01:28:03.990
Stephen Marcus: they should get the proper direction or decent direction.

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01:28:04.650 –> 01:28:23.039
Val Feeney: Yes, yes, sir. And guys, thank you so much for having me. I appreciate it. Anytime. You guys want me to come be a nerd on some of this insurance stuff. Happy to do so, happy to be a resource for anyone in the in the industry, or really anyone who has just can’t wrap their head around an insurance item with their association.

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01:28:25.260 –> 01:28:41.190
Jake Marcus: Excellent. No, this was. This was a pleasure, Val, and we’ll definitely we’ll definitely be in touch, if not on this, on you know, in the Community Community Association world and appreciate your time and and and brilliance in this.

455
01:28:41.460 –> 01:28:43.870
Stephen Marcus: But but final question.

456
01:28:44.060 –> 01:28:45.619
Stephen Marcus: So you’re in Walpole,

457
01:28:47.180 –> 01:28:55.459
Stephen Marcus: Putting aside your high school team, which seems to be in the Super Bowl every year. Are you a patriots, fan.

458
01:28:56.316 –> 01:28:56.769
Val Feeney: I am.

459
01:28:57.610 –> 01:29:07.940
Val Feeney: I live in the the shadow of Gillette Stadium, so I walk there often. But I will say it’s funny. I’m new to.

460
01:29:07.940 –> 01:29:09.320
Stephen Marcus: You were around.

461
01:29:09.320 –> 01:29:11.009
Val Feeney: Oh, no! Die! I’m a Diehard Beach.

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01:29:11.010 –> 01:29:12.020
Stephen Marcus: Oh, okay. Okay.

463
01:29:12.020 –> 01:29:14.300
Val Feeney: I’m I’m actually gonna I’m gonna enjoy.

464
01:29:14.300 –> 01:29:17.010
Stephen Marcus: Jake. Jake does some tailgates that would like to have. Yeah.

465
01:29:17.296 –> 01:29:17.870
Val Feeney: Good luck!

466
01:29:17.870 –> 01:29:18.930
Stephen Marcus: No, seriously.

467
01:29:18.930 –> 01:29:26.189
Val Feeney: Yep, I’m gonna enjoy the next few years of Mike Rabel before. You know, the medium media runs him out of town. I think it’s awesome.

468
01:29:26.940 –> 01:29:35.480
Stephen Marcus: Yeah. And for my final note to be a total to be totally awful my little story is

469
01:29:37.100 –> 01:29:41.799
Stephen Marcus: I live in the condominium unit

470
01:29:42.050 –> 01:29:51.230
Stephen Marcus: that Mike Vrabo bought, and I did the Condominium documents for, and did his close closing for the developer

471
01:29:51.610 –> 01:29:58.289
Stephen Marcus: 2223 years ago, when he 1st was traded from the steelers to the patriots.

472
01:29:58.670 –> 01:30:00.370
Stephen Marcus: So that’s

473
01:30:00.940 –> 01:30:10.530
Stephen Marcus: my only claim to fame. And and oh, and for any sports fans jake was at Gillette, for training camp.

474
01:30:11.090 –> 01:30:26.779
Stephen Marcus: I don’t think he’s trying out for the team, but he he did say, somebody’s a fan of Hey K. Adams, who is visiting different training camps, and today is with the patriots.

475
01:30:27.180 –> 01:30:28.700
Stephen Marcus: No. Is that showing.

476
01:30:28.970 –> 01:30:29.780
Val Feeney: Love it.

477
01:30:29.950 –> 01:30:32.939
Stephen Marcus: Okay. Thanks. Everybody.

478
01:30:33.480 –> 01:30:34.430
Val Feeney: All right. See ya.

479
01:30:34.840 –> 01:30:37.549
Jake Marcus: Alright, thanks everyone.

480
01:30:37.670 –> 01:30:39.949
Jake Marcus: That will be the end of the session.

481
01:30:47.220 –> 01:30:48.649
Stephen Marcus: I thought it was really good.

482
01:30:51.140 –> 01:30:53.040
Jake Marcus: Yeah, I agree.