The timeshare industry is booming. In fact, 2016 marked the seventh consecutive year of growth, according to the American Resort Development Association. With their unique business model and increasing customers, timeshare companies must take extra precautions to protect their assets. One of the most cost-effective means of doing so is commercial excess insurance. This supplemental insurance is an affordable way to increase financial protection in the event of large, unexpected expenses.
What is commercial excess insurance?
Excess insurance is intended to cover expenses that are not fully covered by conventional insurance, i.e., general liability, D&O liability, workers comp, and, in some cases, property insurance. Each of these commercial policies has a predetermined maximum pay-out. Excess insurance will kick in once the maximum pay-out of the other policies has been reached.
Commercial excess insurance is tailored to suit the needs of commercial enterprises, but not all commercial policies are the same. An experienced agent will be able to match the right commercial excess insurances for the rapidly growing timeshare industry.
Why do timeshare companies need commercial excess insurance?
Timeshare companies are at a higher-than-average risk of needing to use commercial excess insurance. Unlike other planned living communities, timeshares cycle through many more residents per year. Each new visitor to a timeshare property increases the likelihood of a lawsuit that may cost more than the limit on a general liability policy.
Injuries and accidents are among the leading causes of costly lawsuits for timeshares. For example, a timeshare visitor or owner can sue after tripping on a crack in the sidewalk, slipping on water by the pool, being the victim of a crime, or being bitten by a dog. If the current general liability policy covers up to $1 million, a $2 million lawsuit leaves the timeshare company responsible for an additional $1 million out of pocket. Commercial excess insurance would cover this additional $1 million.
In other cases, a timeshare company may face lawsuits related to its board operations, workers’ comp, cyber attacks, or property damage, though not all excess policies cover these areas.
Why can’t timeshare companies just increase their current insurance policy coverage?
While it is possible to increase the maximum payout for current liability policies, it is not cost-effective. To obtain more coverage, you must pay higher premiums—and usually higher deductibles, too. With excess insurance, the same amount of additional coverage can be purchased for a fraction of the price. Working with an experienced agent who understands the needs and risks of the timeshare industry is the best way to get the right type and amount of commercial excess coverage.
About Kevin Davis Insurance Services
For over 35 years, Kevin Davis Insurance Services has built an impressive reputation as a strong wholesale broker offering insurance products for the community association industry. Our President Kevin Davis and his team take pride in offering committed services to the community association market and providing them with unparalleled access to high-quality coverage, competitive premiums, superior markets, and detailed customer service. To learn more about the coverage we offer, contact us toll-free at (877) 807-8708 to speak with one of our representatives.