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December 2003 MEMORANDUM TO CLIENTS INSURANCE: THE IMPORTANCE OF READING THE FINE PRINT TO KNOW WHAT YOUR POLICY COVERS What would happen if an owner or visitor is injured while using equipment in the Association’s exercise room or in the lobby or outside the building? Would the Association be covered for his or her injuries? Maybe yes, maybe no - it depends on what the policy includes and excludes. The recent decision of Union American Insurance Company v. Haitian Refugee Center, 28 Fla. L. Weekly D2220 (Fla. 3rd DCA, September 24, 2003), emphasizes the importance of knowing what your insurance policy covers. Donaldson Dona St. Plite died after being shot by a member of a crowd at a street rally sponsored by the Haitian Refugee Center a mile from the Center’s headquarters. Mr. St. Plite’s Estate filed a wrongful death action against the Center, seeking money damages for the Center’s negligence. The Haitian Refugee Center’s insurance policy limited coverage to "bodily injury ... arising out of [t]he ownership, maintenance or use of the premises shown in the [s]chedule and operations necessary or incidental to those premises." The trial court ruled that the Center’s insurance company provided liability coverage to the Center for the shooting death of Mr. St. Plite. The trial court found that the event at which Mr. St. Plite was killed was "an operation necessary or incidental to the business" of the Center. The Florida appellate court disagreed with the findings of the trial court. The appellate court pointed out that the policy used the word "premises" and not "business." Because the death occurred at a location away from the Center and in a manner unrelated to the Center, the court concluded that the Center’s insurance policy did not cover Mr. St. Plite’s shooting death. This case emphasizes the importance of knowing what your insurance policy covers. As we all know, insurance policies are typically long and difficult to read. Nonetheless, it is important to know what type of coverage you have in the event someone is injured on your property. Take the time to read your insurance policies. Consult with your insurance agent. It may help avoid surprises down the road. FIRE AND SAFETY CODE: ALL HIGH-RISE CONDOMINIUMS MUST BE RETROFITTED WITH FIRE SPRINKLER SYSTEMS BY 2014 Do you live in a high rise condominium in Florida? Does your building contain a fire sprinkler system? If not, despite the cost, your condominium association may be required to install a fire sprinkler system in common areas. Florida Statute §718.112(2)(l) requires the Association’s Bylaws to provides for "a provision that a certificate of compliance from a licensed electrical contractor or electrician may be accepted by the association’s board as evidence of compliance of the condominium units with the applicable fire and life safety code." Thanks to Florida Senate Bill 592, which became effective as of May 21, 2003, Associations can opt out of individual unit and common element installation of a fire sprinkler system under certain circumstances. The first test under the statute deals with the height of buildings. Section 718.112(2)(l) provides that a Florida condominium association may not forego the retrofitting of a fire sprinkler system of common areas in a building over 75 feet in height. The common areas include any enclosed hallway, corridor, lobby, stairwell or entryway. If your condominium building does not exceed the height threshold, then the statute next provides a complicated procedure for opting out of the fire sprinkler requirements. The statute provides that the unit owners can forego retrofitting of the fire sprinkler system if two-thirds of all voting members agree to do so. The vote to opt out may not be obtained by general proxy or limited proxy. The vote must be obtained either (1) by a vote cast personally at a duly called membership meeting or (2) by execution of a written consent by the member. A certificate attesting to such vote must be recorded in the public records. The Association must provide each unit owner written notice of the vote to forego retrofitting of the required fire sprinkler system in at least 16-point bold type, by certified mail, within 20 days after the Association’s vote. A copy of the notice must be provided by the current owner to a new owner prior to any closing and to a renter prior to signing a lease. Local authorities cannot require completion of retrofitting of common areas with a sprinkler system before the end of 2014. However, it is important to note that if the retrofitting has not been completed as of December 31, 2014, the building will be in violation of the Florida Fire Prevention Code. Associations should therefore begin the process well in advance of the deadline to either opt out of the requirements or to have fire sprinkler systems installed. Remember to follow each point mentioned above. FIRM NEWS In observance of national holidays, the firm’s offices will be closed on Thursday, December 25, 2003 and Thursday, January 1, 2004. The firm’s offices will also be closed the afternoon of December 16, 2003. Happy holidays! May the new year bring peace, happiness and good health to all.
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