The Benefits of D&O Insurance for Condo Association Board Members

Posted on: September 12, 2019 by Javier iSure

When insurance brokers take on clients in the condo association market, there are a number of unique challenges that present themselves. To alleviate stress around risks and challenges, brokers can work with condo association board members to better understand how to be protected against claims and major losses.

One of the best ways to combat any major risk or loss is through condo association insurance, but through the lens of directors and officers (D&O) insurance. This kind of coverage can provide the high level of protection that condo association board members need in order to operate among the possibility of claims, such as breach of contract or liability claims. And with an increase in these kinds of claims in recent years, it’s important to have the right kind of condo association insurance in order to operate effectively.

What is D&O?

Directors and officers insurance is a type of policy that stands in place to keep the officers and trustees of a community association board protected from liability in the case of an accusation from condo owners. When a condo owner becomes upset, they will bring up almost any claim against the association in which they’re living under.

If someone from a condo association has accusations brought against them, a legal battle could bring down the reputation and finances of the condo association as a whole. Legal fees and large settlements could be on the docket, completely draining the individual or association in question. D&O insurance can pay for the defense of the board member against the claim. It can also pay for things like damages, or settlements if he/she is found at fault. While obtaining condo association insurance is a good step for boards, forgetting about the individuals on the board is a big misstep.

Coverage Under D&O Insurance

D&O insurance typically covers everyone who is currently serving on the board and includes fees associated with legal defense. It also typically covers the settlement amount in the event of a judgment in a case. In the case of willful negligence of fiduciary duty, most policies won’t cover the board member. The same goes for intentional breach of laws or of the governing documents.

The policies also usually don’t cover things like fraud or any lawsuits that existed before a D&O policy was purchased.

As mentioned above, while it’s a good start to have some level of condo association insurance, community boards need to go further and opt for D&O insurance to have a well-rounded approach to being kept safe from claims. It’s important to give a close look at whatever current coverage is in place to see if D&O is already included as part of a condo association insurance package.

The cost of not having a D&O insurance option is much higher in the long run. This flexible plan, while costing more to add on its own, pays off by allowing a community association to purchase the amount needed to specifically cover the association board. Fees related to claims made by individuals can burn a hole in an association’s pocket and end up costing much more compared to not having D&O.

About iSure Insurance Brokers

After serving leaders in the Greater Miami market for more than three decades, iSure Insurance Brokers has become the provider of choice for discerning commercial clients and individuals alike. Because no two insurance programs are or should be alike, you can be sure that iSure will craft a comprehensive approach to protection that is as unique as you are. We welcome the opportunity to protect what you have worked so hard to build. Please contact us at (305) 223-2533 to learn more about what we can offer you.

Posted in: Blog Commercial Insurance Community Associations