INSURANCE: Expose These 4 Myths To Protect Your Property From Grave Liability

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In today's litigation-happy world, liability seems to be lurking around every corner. But how do you figure out what kinds of insurance coverage will actually protect you versus coverage that's a big waste of money? Eli's experts have the answers for you.

Your first line of defense against lawsuits should be a sound risk-management plan, including policies, procedures and rules for you and your employees to follow at all times. But when you've done all you can do to combat potential liability risks, your insurance is your safety net. To be sure it will catch you, review these four common myths about insurance in the assisted housing industry and the truths behind them.

Myth #1: All You Need Is Worker's Comp And Property Insurance

Truth: Although it is true that worker's compensation (if you have three or more employees, in most states) and property insurance (if your mortgage lender requires it, and most do) are the only insurance policies you absolutely must have, that doesn't mean that they're the only protection you need, says Gwen Zander, a certified aging services professional for Risk Management Continuum, Inc in Atlanta. And when it comes to protecting yourself and your property, this isn't an area where you should cut corners to save a few dollars.

Other insurance policies that you should consider are:

• General liability;
• Professional liability/errors and omissions;
• Fidelity insurance or fidelity bond;
• Business interruption;
• Directors and officers liability;
• Automobile.

Editor's note: See our quick-reference chart on page 93 for a complete explanation of each insurance product.

PHAs, take extra precaution: "The Annual Contri-bution Contract (ACC) requires Public Housing Authorities (PHAs) and Indian Housing Agencies (IHAs) to maintain adequate loss prevention programs," which includes sufficient insurance for the property, according to HUD.

"While the ACC does require HUD to monitor the procurement of insurance, the responsibility for procurement rests with each [housing authority]," HUD says. To view HUD's "Property/Casualty Insurance Guidebook 7401.5" and get more information for PHA insurance and risk management, visit http://www.hud.gov/offices/pih/programs/ph/am/pci.cfm.