Understanding the Impact of “Life & Safety” Issues on Insurance and Liability

True Property Inspections goes beyond addressing just the visible damage.  

“Life and safety” are not to be taken lightly when it comes to resident safety or insurance liability for your community.

What is “life & safety”?

A “life & safety” issue is considered anything that threatens a reasonable level of safety for residents. They can be identified by your local municipality, fire department or a third-party inspector. Common issues we often identify revolve around structural components, such as stairways, balconies, landings and stucco walls.

To put potential risks into perspective, every concrete step in a stairway weighs approximately 98 pounds. an average staircase consisting of 15 steps, this can add up to nearly1,500 pounds. One fallen step can pose serious safety issues; an entire stairway collapse would be devastating.

Insurance Liability

Once recorded as a “life and safety” concern, liability escalates significantly, rendering the community vulnerable to potential risks and financial burdens. This can significantly impact insurance costs or even lead to the loss of coverage altogether.

Charlie Boornazian, Vice President of Risk Alternative at Insurance Office of America, emphasizes the seriousness of “life and safety” issues in insurance matters.

Any potential insurance underwriter aware of active “life & safety” issues in your community will want assurance that issues have been corrected. Failure to do so may result in a denial of coverage, or if coverage is extended, it will likely come at a higher cost.

Beyond the impacts to your coverage, Boornazian says “failure to address known issues can result in increased liability and potential punitive damages in the event of a claim. This responsibility lies on the community.”

If a resident is injured due to a “life & safety” issue that was not addressed, a potential lawsuit could likely result in both compensatory and punitive damages. While your insurance company may cover the compensatory damages, Florida law prohibits them from covering punitive damages. Therefore, the cost of punitive damages must be paid by the association.

Punitive damages are typically 3xthe compensatory damages amount or $500,000, whichever is greater. Certain exceptions can further increase the cost of these damages, resulting in additional financial repercussions for the association.

Board of Directors Liability

With changes in the law (Florida Statute 617.0834), Board members can be held personally liable for certain decisions made in their official capacity, if they meet the following conditions:

  • Violation of criminal law, unless the Board member had reasonable cause to believe their conduct was lawful;
  • The Board member received improper personal benefit from the transaction;
  • The action can be considered “reckless or an actor omission that was committed in bad faith or with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety, or property.”

In the case of “life & safety” issues, any Board members who are aware of the risks but do not act to resolve the safety issues could be held personally liable should someone get injured.

Securing the Future of Your Community

Boornazian believes the question comes down to “how much does a human life cost?” While no one would ever put a price on the life of human being, this question underscores the gravity of ensuring “life and safety” standards are met. It's not just about avoiding financial liabilities but also about protecting the well-being of everyone on-site.

To address these concerns effectively, regular inspections are crucial. Whether it's for common knowledge issues or previously identified problems, inspections ensure you have a clear understanding of any potential risks in your community. Furthermore, taking prompt action to resolve any identified issues is essential in maintaining the safety and integrity of your property.

Prioritizing “life and safety” measures is not only a legal requirement, but a fundamental aspect of protecting your residents and property. By addressing these issues proactively, you can minimize liability risks, ensure insurance coverage and, most importantly, safeguard the well-being of everyone involved.