Is $1,000,000 of liability insurance a lot of money?
On paper, it sounds substantial. For many individuals, boards, and businesses, it feels like a comfortable number. But in today’s legal and medical environment, the real question isn’t whether $1 million sounds like enough — it’s whether it would actually be enough when something goes wrong.
Every property, business, and community association is different, which can make it difficult to imagine how a large liability claim might occur. Unfortunately, real-world claims continue to show just how quickly damages can exceed standard limits.
To illustrate this risk, let’s look at a real claim scenario involving a condominium association — and what it teaches us about liability limits in 2026.
Condominium and homeowners associations face a unique and growing set of liability exposures. Many communities include amenities such as:
Playgrounds
Swimming pools
Clubhouses
Walking trails
Retention ponds or lakes
While these features add value and appeal, they also significantly increase the risk of serious injury or death. Common area accidents are one of the most frequent sources of liability claims against associations — and when injuries occur, lawsuits often follow.
What makes these claims especially complex is that responsibility can involve:
The association
The board of directors
Property managers
Individual unit owners
Maintenance, repairs, and oversight of common areas are critical. When something fails, liability can extend far beyond the association itself.
Associations can be held liable when:
Common areas are not properly maintained
Repairs are performed incorrectly or without oversight
Safety inspections are inconsistent or undocumented
Known hazards are not addressed
Even when an injury seems accidental, courts often examine who had responsibility and control over the area where the injury occurred.
A condominium association with approximately 80 units maintained a small playground with a swing set for residents and guests. The swing set had recently been repaired by a unit owner — not a licensed contractor.
While a young man was using the swing, a metal attachment failed and struck him in the head. He suffered a severe closed-head injury.
The consequences were devastating:
Over $300,000 in medical expenses for just the first 10 days in ICU
Long-term rehabilitation to relearn how to walk and speak
Permanent, life-altering injuries
The injured party sued the association and was awarded $7.2 million in damages.
Here’s how the insurance responded:
The association carried $1,000,000 in General Liability coverage
The association also carried $1,000,000 in Directors & Officers (D&O) coverage
Once those limits were exhausted, there was no additional insurance to respond.
Because the association did not have sufficient assets to cover the remaining judgment:
A lien was placed on every individual unit owner’s property for their portion of the unpaid damages
Unit owners then sued the board under the D&O policy for failure to obtain adequate insurance
The D&O policy limits were also exhausted
Ultimately, unit owners were personally responsible for more than $5.2 million in uncovered damages.
This scenario is not an outlier.
Across the U.S., claims involving:
Near drownings
Traumatic brain injuries
Playground accidents
Falls and premises liability
Wrongful death
are resulting in verdicts and settlements well into the millions — often far exceeding traditional liability limits.
Medical costs, legal expenses, and jury awards have continued to rise, and courts increasingly look to associations and boards to demonstrate proactive risk management.
In today’s environment, $1 million of liability coverage is dangerously low for most associations and exposes:
Boards of directors
Individual unit owners
Property managers
to significant financial risk.
There is no one-size-fits-all answer. The appropriate amount of liability insurance depends on:
Size of the association
Number of units
Amenities and common areas
Visitor traffic
Financial reserves
State-specific legal climate
That said, we are confident in this statement:
In today’s litigious environment, $1 million in liability coverage is not enough.
Most associations should strongly consider:
Higher General Liability limits
Excess or Umbrella Liability policies
Increased D&O limits for board protection
Umbrella coverage is often surprisingly affordable compared to the level of protection it provides — especially when weighed against the personal financial exposure of unit owners and board members.
Insurance can’t undo a tragedy or restore a life — but it plays a critical role in protecting communities from financial devastation after a serious accident. If you serve on a board, manage a property, or live in a community association, reviewing liability limits should be a priority — not an afterthought.
Contact us today by emailing Service@TheSpireTeam.com
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