Insurance & Risk · Quorum Case Files Season 9 Companion · Liability Limits
The Liability Limit Is Sized to the Loss the Board Can Imagine: Champlain Towers South and the Forty-Eight Million
Within days of the June 24, 2021 collapse, the association’s lawyer told a Miami-Dade judge what the building was insured for: $30 million on the property, $18 million in liability. One year later the same court approved a settlement fund of $1.02 billion. This article is about the distance between those two numbers, who closed it, and what a board writes down at renewal so that its own liability limit is a decision and not a habit.
Educational notice. This information is educational in nature and should not be construed as legal or insurance advice. The Champlain Towers South litigation closed with final settlement approval on June 23, 2022; every dollar figure and quotation below is drawn from contemporaneous news reporting and is attributed to its outlet in the sentence where it appears, because the court file itself was not read for this article. Nothing here assigns fault for the collapse to any person or entity, and every settlement described is a settlement, not a finding. Consult qualified association counsel and a licensed insurance professional regarding your association’s coverage and jurisdiction.
Surfside, Florida: Two Numbers
Champlain Towers South was a condominium association in the Town of Surfside, Miami-Dade County, Florida. One tower, 136 residential units. The association owned the building and the land under it. On June 24, 2021, the building collapsed in the night and 98 people died. Those facts were reported by every major outlet in the country, and this article will not add to them. The collapse is not its subject. The number on the association’s declarations page is.
Within days, in the litigation that followed, the association’s lawyer stood before Circuit Judge Michael Hanzman and put the coverage on the record. As the Florida Bar News later reported it, the building carried $30 million of property coverage and $18 million of liability coverage, $48 million in total. NPR and the Associated Press reported the same $48 million figure on July 2, 2021, along with the judge’s response. The coverage, Judge Hanzman said, “will obviously be inadequate to compensate everyone fully.”
He said that in the first week, before the recovery was complete and before anyone had a final count of claims. He did not need an actuary. Eighteen million dollars of liability coverage against 98 deaths and 136 destroyed homes is not a number that requires analysis.
One year later, almost to the day, the same judge gave final approval to a settlement fund that the Associated Press reported at $1.02 billion. The association’s own policies are not where most of that money came from. The association’s policies, together with the sale of its land, were allocated, as reported, to the people who had lost their homes. The wrongful-death claims were paid from other declarations pages entirely: the insurers of the association’s former professionals, of the project next door, and of the town.
That is the whole lesson of this case, and it is a governance lesson rather than a legal one. A liability limit is a statement about the worst loss a board is willing to imagine. The loss that actually happens is not consulted when the limit is set. When the two diverge by a factor of twenty, the loss does not shrink to fit the limit. It goes looking for other people’s coverage, and in most communities there is no ring of defendants around the building with a billion dollars of insurance among them. There are only the owners.
One honest limitation before the mechanism. Nothing in the research behind this article or its companion episode reached a raw record of how the Champlain Towers South coverage was placed: whether the limits were ever higher, whether a broker ever recommended more, whether any renewal was debated. The Town of Surfside’s document pages were offline at the time of research. The court file exists in Miami-Dade Circuit Court as case number 2021-015089-CA-01, and it has not been read. Until it is, the question of how the limit came to be $48 million is a records task, not a story, and this article does not speculate about it. The lesson does not require the minutes. It is in the two numbers.
The Mechanism: Two Pots, Two Limits
What follows is general insurance vocabulary, explained for a board member who has never read a declarations page. It is not a description of the Champlain Towers South policy, whose text was not available for this article.
Property coverage pays for what the association owns
An association’s property policy responds when the common elements, and in many condominiums the building structure itself, are damaged by a covered cause. It pays to repair or rebuild, up to the property limit, subject to deductibles, exclusions, and whatever valuation basis the policy uses. The property limit is a number about the building. In the best case it is derived from a current replacement-cost estimate prepared by someone qualified to prepare it. In the ordinary case it is a number that was accurate the year it was set and has been renewed since.
Liability coverage pays other people
An association’s general liability policy responds when a third party claims the association is legally responsible for bodily injury or property damage. It pays defense costs and, if the association is found liable or settles, pays the claimant, up to the liability limit. The liability limit is a number about other people’s losses, and it is sized by a different kind of thinking than the property limit. There is no replacement-cost appraisal for a wrongful-death claim.
The two pots do not pour into each other
This is the point boards most often miss. A $30 million property limit does not become available to pay liability claims when the $18 million liability limit is exhausted. Each coverage part has its own limit, and each limit is the ceiling on that coverage part. When a court or a settlement allocates an association’s insurance, it allocates each pot according to the policy that created it. In the Champlain Towers South settlements, as reported, essentially the entire insurance tower went to the unit owners, and the liability side of the loss was closed by other parties’ insurers. Whether that allocation reflected the policy structure, the court’s reasoning, or both is a question for the court’s own orders, which this article has not read and therefore does not characterize.
How a liability limit gets its size
Picture a renewal meeting. The board thinks of the losses it can picture: a fall on a wet pool deck, a railing that gives, a fire in one stack of units. Against those losses, $18 million is generous. The broker may say so. The treasurer notes that the premium is already the largest line in the budget. Everyone nods, and the limit renews.
Nothing about that process is improper. It is how limits are set in nearly every association in the country, and this article makes no claim that it is how the Champlain Towers South limit was set, because the record was not reached. The point is structural. A liability limit sized by imagining losses is a limit sized to the imaginable loss. Nobody at a renewal meeting is pricing the unimaginable one, and in fairness, the product that would cover a 136-unit association against 98 deaths, at a premium that association could pay, does not exist in the market. So the governance question is not “why didn’t they buy a billion.” The governance question is: what was the $48 million for, and who did everyone assume would pay when it ran out?
The one place Florida law puts a size on association coverage
There is no statute anywhere, so far as this research found, that tells a board what liability limit to carry against a loss of life. There is, however, one place where Florida law puts a per-unit number on an association’s coverage, and it is instructive because it shows how the state itself thinks about size. It is the statute governing the Florida Insurance Guaranty Association (FIGA), the fund that steps in when a property insurer becomes insolvent.
Section 631.57(1)(a)3.a of the Florida Statutes provides that, for policies covering condominium or homeowners’ associations that have a responsibility to insure residential units, FIGA’s obligation “includes that amount of each covered property insurance claim which is less than $200,000 multiplied by the number of condominium units or other residential units.” That per-unit figure was doubled from $100,000 to $200,000 by chapter 2020-54, Laws of Florida (House Bill 529), effective July 1, 2020.
Multiply $200,000 by 136 units and the figure is $27.2 million. That is arithmetic, not a finding, and it must be read with two cautions. First, FIGA did not apply at Champlain Towers South; no carrier failed, and this article does not suggest otherwise. Second, section 631.57 is a property number. It says what the state decided a dead insurer’s unpaid property claims on a condominium building are worth protecting. It says nothing at all about liability. When the legislature wrote down what a condominium building’s coverage is worth, it wrote a property figure. The liability figure remains the board’s alone.
FIGA is also the water every Florida association has been standing in. Between 2021 and 2023 the Office of Insurance Regulation approved four FIGA assessments on Florida policyholders (orders 286582-21, 293027-22, 299727-22 and 308776-23), the last a 1 percent emergency assessment for hurricane-related insolvencies running from October 1, 2023 until the Series 2023A bonds are repaid. FIGA’s own assessments page states that policies effective October 1, 2026 and later no longer carry it. None of this explains the Champlain Towers South limit. It is context for the market every Florida board renews into.
The Declarations Page
Every episode of the season stops once, after the loss and before the reckoning, to ask three questions of the declarations page. Here the page itself was not in hand; what stands in for it is the association’s own lawyer reading its contents to a judge, as reported.
| Question | What the record supports | What the record does not reach |
|---|---|---|
| What the board thought it had bought | Nothing in the record. No minutes, renewal history, or broker correspondence was reached. What any board thinks when it buys an $18 million liability limit is a limit sized to the losses it can picture. | Whether the limits were ever higher, whether more was recommended, who sat on the board at renewal. All UNCONFIRMED; the court file (Miami-Dade case 2021-015089-CA-01) is the records task. |
| What the policy actually provided | $30 million property, $18 million liability, $48 million total, as stated by the association’s lawyer in open court and reported by the Florida Bar News, with the $48 million total also reported by NPR and the Associated Press on July 2, 2021. One carrier, James River Insurance Company, was ordered to release $2 million early, as NPR and the AP reported. | The policy text. Whether James River was the property or the liability carrier. The identity of any other carrier. |
| What the distance cost, and who paid | $48 million in limits against a fund approved at $1.02 billion, as reported by the Associated Press. The association’s number was less than five percent of what closed the loss (arithmetic on the two reported figures). The association’s insurance and land went to the unit owners; the death claims were paid, as reported, from other defendants’ insurance. | The allocation of the death-claim side by defendant. Those figures were not read raw and are not reproduced here. |
The property number was never going to rebuild a tower of that size. The liability number was never going to answer 98 wrongful-death claims. Neither was written for that night. That is not an accusation. It is a description of what every liability limit in the country is: a figure sized to the imaginable.
The Record, As Reported
The court file was not read for this article. What follows is the sequence as contemporaneous outlets reported it, each attributed in place. Every settlement below is a settlement. No court found any party on this list to have caused the collapse, and this article does not say one did.
July 2021: receivership. Within weeks of the collapse, Judge Hanzman ordered the association into receivership and appointed Michael Goldberg of the Akerman firm as receiver, as NPR and the Associated Press reported on July 2, 2021. A receiver is an officer of the court who runs the entity in place of its elected directors. From that day, the board members, whatever they knew or did not know, were no longer the decision-makers. A receivership is not a finding of fault against anyone. It is a court recognizing that an entity has one asset, the land, and one pot of money, $48 million, and more claimants than either can satisfy, and placing a neutral party in control of both. The same reporting recorded the order directing James River Insurance Company to release $2 million early so that money would reach people who had nothing.
March 30, 2022: the owners’ settlement. Judge Hanzman approved an $83 million settlement for the owners of the 136 units, as CNN reported. CNN reported its composition as nearly $50 million from the association’s insurance and $33 million from the land, all contingent on the land selling for at least $120 million.
Two reported figures do not reconcile cleanly, and this article will not smooth them. The limits were reported at $48 million; the insurance contribution to the owners’ settlement was reported as “nearly $50 million.” The difference may be interest, a reporter’s rounding, or how the early James River release was counted. The docket would tell. The reporting does not, and the discrepancy is noted here rather than resolved.
What is not in doubt is the shape. The association’s own assets, essentially the entire insurance tower plus the land, went to the people who lost their homes. The families who lost people would have to be paid by someone else. The court’s reasoning for that allocation belongs to the court’s own order, which has not been read; it is not characterized here.
Spring 2022: the professionals’ insurers. Through the spring, NBC 6 in Miami (Tony Pipitone) reported a series of settlements from parties who had worked for the association or on the project next door: the association’s former law firm, Becker & Poliakoff, $31 million; the engineering firm Morabito Consultants, $16 million; and DeSimone, the engineer on the neighboring Eighty Seven Park project, $8.55 million. Each, as reported, was paid by an insurer. The plaintiffs alleged; the defendants’ insurers paid to end the allegation. That is what liability insurance is for, on their side of the table as well.
May 2022: the global deal. The Commercial Observer reported a $997 million settlement, “mostly from the defendants’ insurance policies.” The settling defendants, as reported, included Terra, the developer of Eighty Seven Park, and its contractors; Becker; the Town of Surfside; and the Eighty Seven Park condominium association itself. The neighbors’ association. The town. Their insurers.
June 23, 2022: final approval. One day short of a year after the collapse, Judge Hanzman gave final approval. The Associated Press reported the fund at $1.02 billion, with roughly $100 million in fees and $96 million allocated to the owners of the 136 units, up from the $83 million approved in March. The land sold for $120 million to a buyer from Dubai, as reported. Not one claimant opted out.
Posture: closed. Final approval June 23, 2022; land sold. The association, as a going concern, is gone. The judge’s first-week sentence turned out to be the most accurate forecast anyone made in that courtroom.
Where a Loss Goes When the Limit Is Small
Put the two numbers side by side one more time. Forty-eight million dollars on the association’s declarations page. One point zero two billion dollars to close the loss. The association’s number was under five percent of the total.
When a limit is too small for the loss, the loss does not shrink. It goes looking for other declarations pages, and it reaches every one it can: the vendors’, the neighbors’, the town’s. At Surfside there happened to be a ring of defendants around the building with, as reported, roughly a billion dollars of coverage among them. That is not the normal case. In the other seven communities this season examines, nobody else’s insurer was reachable. The distance between the limit and the loss was paid by the owners, through special assessments, through coinsurance penalties, through the forced sale of their own buildings.
So the hard part of the lesson is this: the Champlain Towers South board could not have bought its way out of this loss. No 136-unit association can. The standard is not “buy a billion.” The standard is to know what the number is for, to know what it is not for, and to write both down.
What a Board Does With This
CICSC Standard FIN-006, Master Policy Insurance Adequacy Review, does not recommend a liability limit or any other coverage figure. It governs something narrower and more durable: whether the board asks, when it asks, and what it records. Applied to the liability limit, the practice looks like this.
Calendar the review to every renewal, with a named owner. FIN-006 § 2.1 makes the adequacy review a standing agenda item rather than a reaction to a renewal quote. The liability limit is reviewed on the same calendar as the property limit, not assumed because it renewed last year without incident. A limit can be wrong for ten years and nothing happens. Nothing in the ordinary budget cycle will flag it.
Ask the written questions, including one about the liability limit specifically. FIN-006 § 3.1 lists the questions a board puts to its licensed insurance professional in writing before each renewal. For the liability coverage part, boards typically ask: What loss scenario is this limit sized to? What would the market sell this association, at what premium, above the current limit? Is there an umbrella or excess layer available, and what does it cost? What does this policy exclude that this community is exposed to? The board does not answer those questions itself. It asks them, in writing, and records the answers.
Record the answer as a decision, not a premium. FIN-006 § 4.1 puts the review in the minutes: the date, the professional consulted, the questions asked, the answers received, any gap identified, and the board’s decision on each gap. The sentence a board writes about its liability limit might be as plain as: “The board reviewed the general liability limit of $X with [broker] on [date], understands it to be sized for [the stated scenario], was quoted $Y for an additional $Z of excess coverage, and voted [to purchase / not to purchase] it.” That sentence converts a habit into a decision, and the next board inherits the decision.
Record declined coverage as declined. FIN-006 § 4.2 is the clause most directly aimed at this case’s silence. A coverage that is absent because it was never considered and a coverage that is absent because the board priced it and voted against it look identical on the policy and are entirely different in the record. Where excess liability or a higher limit is offered, priced, and not purchased, the minutes record that it was offered, what it cost, and the vote.
Ask counsel the document questions. FIN-006 § 3.2 routes to counsel what the declaration requires the association to insure, what applicable law requires and on what cadence, and what governs where the documents and the policy disagree. Whether any Florida statute or any particular declaration speaks to a liability limit is a question for that conversation, not for this article.
Tell the members what the coverage is and is not. FIN-006 § 5.1 calls for an annual plain-language statement of what the association’s policy covers, what it does not, and where owner responsibility begins. A statement that says, in substance, “the association carries $X of liability coverage; owners should consult their own insurance professional about their own exposure” gives owners the one fact they need and does not advise them on their own coverage (§ 5.2).
Understand what sits behind the limits. The Surfside association had, in the end, one asset and one pot of money, and the reported allocation made the land the second-largest line in the owners’ recovery. When policy limits are exhausted, the association’s remaining assets are what is left, and a court decides who gets them. D&O coverage and the business judgment rule operate on the directors’ side; neither protects the association’s balance sheet from a loss larger than its limits.
When to Consult Counsel and the Insurance Professional
Boards typically bring the following to counsel and to their licensed insurance professional rather than resolving them at the table:
- What the declaration and applicable statute require the association to insure, and whether either speaks to liability coverage at all;
- What liability limit, umbrella, or excess layer the market will offer this association, at what premium, and with what exclusions;
- How the property and liability coverage parts interact with one another and with any owner-side policies under the governing documents;
- Whether the association’s fidelity, crime, and directors’ and officers’ coverage are sized and structured consistently with the general liability program;
- How a claim that exceeds the liability limit would be handled, and what the association’s obligations to notify carriers are when a loss occurs;
- How to word the annual coverage statement to members so that it informs without advising.
The Season 9 Companion Series
- The Liability Limit Is Sized to the Loss the Board Can Imagine — the liability limit vs. the loss (this article)
- Eighty Percent of What? The Flood Coinsurance Clause and the Warning in the Board’s Own File — the warning the board shelved
- Who Gets the Mail: Coverage That Lapses During a Management Change — the notice nobody forwarded
- Per Occurrence or Aggregate: Reading the Declarations Page Instead of Asking the Broker — the limit the board misread
- A Paid Claim Is Not a Funded Rebuild: Custody of Insurance Proceeds and the Sell-or-Assess Vote — the proceeds and the vote
- The Appraisal Clause, Both Ways: The Lowball a Board Fought and the Award a Board Poisoned — the appraisal clause, both ways
- Same Street, Two Policies: The Renewal Decision Is the Only One That Survives the Fire — two boards, one street, two renewals
- The Twenty Percent Building: A Policy Sized to Partial Damage in a Building That Burned Whole — the building the market would not insure
Disclaimer. This article is published by the Common Interest Community Standards Council for educational and informational purposes only. It is not legal, insurance, or financial advice and does not establish an attorney-client relationship. The Champlain Towers South facts are drawn from contemporaneous news reporting and are attributed in place: the $30 million property / $18 million liability breakdown and Judge Hanzman’s “will obviously be inadequate to compensate everyone fully” from the Florida Bar News (“Condo task force hears from insurance experts,” 2021); the $48 million total, the receivership and receiver appointment, and the James River $2 million release from NPR and the Associated Press (July 2, 2021); the March 30, 2022 $83 million owners’ settlement and its composition from CNN (March 30, 2022); the Becker & Poliakoff, Morabito Consultants, and DeSimone settlements from NBC 6 Miami (spring 2022); the $997 million May 2022 global settlement and its settling defendants from the Commercial Observer (May 2022); and the June 23, 2022 final approval figures from the Associated Press (June 23, 2022). The underlying court file, Miami-Dade Circuit Court case 2021-015089-CA-01, was not read; no court order is quoted or characterized. Every settlement described is a settlement and not a finding of fault; no cause of the collapse is stated or implied. Statutory text is drawn from Fla. Stat. § 631.57 and ch. 2020-54, Laws of Florida, as published by the Florida Legislature, and from Florida Office of Insurance Regulation orders 286582-21, 293027-22, 299727-22 and 308776-23 and FIGA’s published assessments page. Questions about a specific association’s coverage, claim, or exposure are questions for association counsel and a licensed insurance professional. CIC-SC, its authors, and its members assume no liability for actions taken in reliance on this content.
Published by the Common Interest Community Standards Council (CICSC). Companion to Quorum Case Files Season 9, Episode 1, and to CICSC Standard FIN-006, Master Policy Insurance Adequacy Review. Part of the CICSC Member Education Library. © 2026 CICSC. Educational use permitted with attribution.