Board members, we want you to know that we salute you. And even more, we want to protect you.
Being a board member isn’t always a glamorous job. Sometimes it’s a thankless volunteer position that can even put you under fire for litigation. In your effort to do the best for your HOA or condo association, you may not always please everyone. In some cases, disagreements can lead to suits filed against the association, or even particular members of the board.
This is why Directors and Officers insurance, or D&O Insurance, is so important to any association’s insurance policy. D&O insurance is a policy that protects your board members from personal allegations.
What D&O Protects
D&O insurance is your board’s protection, both as a whole and individually from personal liability in the case of a lawsuit. All legal expenses incurred from attorney’s, court fees, assessments or judgements are typically covered. But as all D&O policies vary from provider to provider it is important that you know what is covered in your policy.
It’s also very important to check your policy for who is covered. Some policies cover board members, volunteers, HOA employees and committee members, while others exclude certain individuals. With over 20 years of experience in community law, we have seen how vital a good E&O policy can be for an association.
What D&O Does Not Protect
In general, all D&O policies exclude protection in the case of negligent or fraudulent acts and intentional breach of laws of association governing documents. However, policies can vary on whether breach of fiduciary duty is covered or not. Additionally, some policies do not cover past incursions, while others do, and most do not cover previous board members.
We’ll say it again: It is absolutely crucial to know what is covered under your association’s insurance policy. A successful HOA or condo association will know exactly what is covered and inform the members of the board about their rights and protections.
It’s not always an easy process understanding your insurance policy or choosing the right one. We can help associations navigate insurance policies and assist your community in many other ways. Don’t hesitate to reach out.