Nevada § 116.3113 - Insurance: General requirements

§ 116.3113. Insurance: General requirements

1. Commencing not later than the time of the first conveyance of a unit to a person

other than a declarant, the association shall maintain, to the extent reasonably available

and subject to reasonable deductibles, all of the following: (a) Property insurance on the common elements and, in a planned community, also on

property that must become common elements, insuring against risks of direct physical

loss commonly insured against, which insurance, after application of any deductibles,

must be not less than 80 percent of the actual cash value of the insured property

at the time the insurance is purchased and at each renewal date, exclusive of land,

excavations, foundations and other items normally excluded from property policies. (b) Commercial general liability insurance, including insurance for medical payments,

in an amount determined by the executive board but not less than any amount specified

in the declaration, covering all occurrences commonly insured against for bodily injury

and property damage arising out of or in connection with the use, ownership, or maintenance

of the common elements and, in cooperatives, also of all units. (c) Crime insurance which includes coverage for dishonest acts by members of the executive

board and the officers, employees, agents, directors and volunteers of the association

and which extends coverage to any business entity that acts as the community manager

of the association and the employees of that entity. Such insurance may not contain a conviction requirement, and the minimum amount

of the policy must be not less than an amount equal to 3 months of aggregate assessments

on all units plus reserve funds or $5,000,000, whichever is less. (d) Directors and officers insurance that is a nonprofit organization errors and omissions

policy in a minimum aggregate amount of not less than $1,000,000 naming the association

as the owner and the named insured. The coverage must extend to the members of the executive board and the officers,

employees, agents, directors and volunteers of the association and to the community

manager of the association and any employees thereof while acting as agents as insured

persons under the policy terms. Coverage must be subject to the terms listed in the declaration. 2. In the case of a building that contains units divided by horizontal boundaries

described in the declaration, or vertical boundaries that comprise common walls between

units, the insurance maintained under paragraph (a) of subsection 1, to the extent

reasonably available, must include the units, but need not include improvements and

betterments installed by units' owners. 3. If the insurance described in subsections 1 and 2 is not reasonably available,

the association promptly shall cause notice of that fact to be given to all units'

owners. The declaration may require the association to carry any other insurance, and the

association may carry any other insurance it considers appropriate to protect the

association or the units' owners. 4. An insurance policy issued to the association does not prevent a unit's owner from

obtaining insurance for the unit's owner's own benefit.