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Homeownership is an emotional investment and an ongoing source of stress. Any action taken by a homeowners association board of directors impacts the value and marketability of each home within the association. Board decisions run the gamut from approving landscaping plans to increasing assessments to engaging in contracts with service providers. At any time, a homeowner can find fault with the board of directors for what they do or don’t do to maintain the community. During a time when homeowner association board members are potentially more susceptible to lawsuits from homeowners alleging mismanagement of funds, poor decision-making and discrimination complaints, addressing your main concerns with the right insurance is critical in helping you effectively govern your association.

Not all Directors and Officers Liability policies offer the important coverage features a Community Association Needs.  Some of the most important coverage features are:

  •  Coverage for both monetary and nonmonetary claims
  •  Automatic coverage for property management company as an insured
  •  Cover your personal assets
  •  Coverage for all directors, officers, employees, volunteers or committee members or organizations


Why Coverage is Necessary:

  • A tenant, who suffered from asthma and panic attacks and was considered a disabled person within the meaning of the federal Fair Housing Act Laws, owned a Terrier dog as a support animal. The tenant was issued a 60-day “Notice to Vacate” due to the property’s “no pet policy.” The tenant sued the condo association for discrimination and failure to make reasonable accommodations for her support animal, which is a violation of the Fair Housing Act. Damages and defense costs for this claim were $15,575.
  • The community association board entertained bids by companies to waterproof the deck around their pool. The contract was worth approximately $120,000. ABC Company submitted the lowest bid and was told the work would have to be started in three months and completed in two weeks. ABC Company bought a performance bond, blocked off the necessary time and, in doing so, refused to take other jobs. The board was having other work done around the pool and encountered problems. A week before ABC Company was to begin work, the board notified them they couldn't start and it might be another three months before they could come on the site. ABC Company sued the board for breach of contract. Damages and defense costs for this claim were $85,250.
  • A group of condominium unit owners brought suit against both the board members and the association management company, alleging the manager contracted for unnecessary repairs and without proper approval. Damages and defense costs for this claim were $128,000.


Call us today for a review of your associations Directors and Officers Liability policy 845-265-2220. 


This document does not amend, extend or alter the coverage afforded by the policy. For a complete understanding of any insurance you purchase, you must first read your policy, declaration page and any endorsements and discuss them with your agent. A sample policy is available from your agent. Your actual policy conditions may be amended by endorsement or affected by state laws.

Posted 10:13 AM

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