Financial Reckoning for Insurers, Condominium Associations Follows Building Collapse

In the wake of the building collapse in Surfside, Fla., that killed at least 97 people, insurers are notifying owners of condominiums 40 years and older in South Florida that they are required to prove their buildings have passed all inspections or risk losing their policies.

The warnings come on the heels of five separate lawsuits filed against the Champlain Towers South Condominium Association and other defendants claiming long-term degradation of the reinforced concrete support structures in its underground parking garage led to the collapse.

Seth Swanson, a commercial lines development professional for the Gulf region at Orchid Insurance, which offers property and liability policies for condominium associations, said some coverages can include building collapse.

Swanson said other causes that could trigger coverage include:

  • Hidden insect or vermin damage
  • Weight of contents, people, equipment, or animals
  • Weight of rain which collects on a roof, and
  • Use of defective material or methods in construction, remodeling, or renovation if the collapse occurs during construction, remodeling, or renovation.

State records show Champlain South was undergoing its 40-year recertification process as is required in Miami-Dade County. As a result, many more lawsuits against the condo association and engineering and architectural firms can be expected as state and federal investigators work to determine the exact cause.

Nathan Coomes, a business development executive at Orchid Insurance, said Orchid requires a private team to complete a building inspection prior to all new and renewal polices are granted.

“Many condominiums pushback on annual inspections and the fees attached to them,” said Coomes. “But regular inspections help to mitigate potential losses in the future for both carriers and their insureds by identifying issues that need to be addressed and repaired.”

Won’t Be Enough

Attorneys for the Champlain Towers South Condominium Association claim the group has $48 million in coverage including a $30 million property insurance policy and $18 million in liability insurance.

“It looks like for the property damage claims and for the injury and death claims there’s going to be a total of $48 million, which will obviously be inadequate to compensate everyone fully for the extent of their losses,” said Miami-Dade Circuit Judge Michael Hanzman, who heard the initial complaints during an emergency online hearing last week.

Swanson said it is not uncommon for rising seas and flooding to exacerbate the erosion of a building’s foundation in coastal areas. He urged condo associations and building owners to contact their agents to review their policies.

“Ask questions,” said Swanson. “That’s why you have an agent. Read your policy. Know what’s in it and have that conversation with your agent.”

Orchid Underwriters Insurance, LLC, is the First Choice for the commercial property insurance needs of condominium associations. If you need flexible products, fast processes, expert underwriting and competitive pricing, superior customer service is a phone call away at 1-866-370-6505 or visit