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Market Trends & Best Practices:
Liability Insurance for NYC Condominiums & Cooperatives in 2022
Sean Kent
By Sean Kent, CPCU, senior vice president-insurance, FirstService Financial
T
o describe New York City’s current
high limits and robust coverage at relatively
Reasons for 2022 Underwriting
liability insurance marketplace for
low costs. An RPG is a group formed by an
Market Conditions
condominiums and cooperatives as
underwriter representing an insurance com-
Recently, a few of the remaining umbrella
“challenging” would be an under-
pany or multiple insurance companies, with
RPGs offering excess liability coverage in
statement. For two years, underwriters and
the goal of providing competitive insurance
New York City have announced they will no
insurance professionals specializing in New
terms to a group of insureds. Umbrella pol-
longer accept applications for quotes, are
York City’s multifamily residential sector have
icies serve as protection for associations in
canceling many existing policies and will add
lamented over the difficulties in obtaining
the event of major or catastrophic liability
coverage limitations or exclusions that have
competitive underwriting terms for general li-
claims stemming from bodily injury or prop-
a significant impact on the overall scope of
ability and umbrella insurance policies. Those
erty damage that exceed the limits of a pri-
coverage. Other umbrella RPGs have exited
difficulties have only worsened to the point
mary general liability policy.
the marketplace, citing poor profitability due to an increase in severe claims with
where many believe that the situation is the worst it’s ever been, especially for umbrella or,
Considering the litigious nature of plaintiff
se"lements in the tens of millions of dollars.
more correctly, excess liability insurance.
attorneys in New York City and unfavorable
Eligibility for programs has also become
laws that present a greater liability expo-
more stringent, and buildings that qualify
As a subsidiary of FirstService Residential —
sure to building owners, access to RPGs has
are seeing significant premium increases for
the largest property management company
been critical for brokers seeking umbrella
umbrella coverage with a reduction on limits
in North America — FirstService Financial fa-
coverage for condos and co-ops.
and coverage. Here are some reasons why:
for more than 8,000 associations annually,
Umbrella premiums were typically a small
1. Large liability claims can take years to
including nearly 500 condos and co-ops in
percentage of a building’s total insurance
develop. The evolution of a bodily injury or
New York City. These properties have his-
premium and, many would argue, far under-
property damage liability claim begins with
torically relied on Risk Purchasing Groups
priced. That trend is ending, as options are
coverage under the general liability policy.
(RPGs) to procure umbrella coverage with
now scarce and premiums continue to rise.
Most general liability policies have a liability
cilitates insurance placements and renewals
68 MANN REPORT | AUGUST 2022
