Beware the tricks insurance companies play. Here’s what your lawyer should be watching out for:
The When-an-Employee-Is-Not-an-Employee Gambit, in which the insurer denies that the property manager is an employee and claims he’s an outside contractor. Attorney Tara Snow, a partner at Novitt, Sahr & Snow, explains that a co-op she represents bought expensive crime insurance; the manager allegedly stole money; the co-op filed a claim; the insurer denied the claim because it said the manager was an outside contractor. Snow says the insurer is being disingenuous at best, and she asserts that the co-op was misled by the insurer into believing that when it bought the higher-priced insurance, the manager was covered. Does the insurance company really think the co-op would have taken out expensive crime insurance simply for the super and the porter – who don’t handle large sums of money?
The Sign-the-Wrong-Document Ploy, in which, a co-op board asks that the corporation be named an “additional insured” on the policy of a contractor hired by residents undertaking an alteration project. But watch out for the fine print: the contractor might add the corporation to the certificate of insurance – not the policy – and the board could be fooled into thinking it was insured. A certificate of insurance is an informational document meant to lay out the specifics of an insurance policy: the policy number, the amount, and who is actually covered. In order to be added as an additional insured in such a situation, your lawyer would have to provide the co-op with an agreement, clearly adding the co-op as an additional insured.
The Your-Ignorance-Is-My-Bliss Approach. Some boards try to save money by having the co-op’s contracts reviewed by the manager instead of the attorney. This approach is summed up by attorney Arthur Weinstein in one word: “Nightmare.”