Insurance news and information

Flickr photo credit: loop oh

If you know what directors and officers insurance is, you know that major corporations won’t operate without it. The liabilities created by a board of directors or by senior management are of the business-crippling kind. D&O coverage allows boards and management to conduct business with one more safety net should decisions go awry and shareholders or customers become litigious.

 So why is it important for your association to have D&O coverage? Because those same liabilities apply to your condo or homeowners association. While your board or your management team may not be determining shareholder value or stock prices, they are making decisions that directly affect residents and the value of their properties. Board members not used to running associations could inadvertently (or on purpose) override existing covenants or bylaws. Not only that, boards could underinsure, or fail to insure the property common grounds, exposing the association to a myriad of liabilities.

 Today’s board members are usually in charge of maintenance oversight and property management. This opens up the association to more claims should board members fail to maintain or manage the property.

 Add to that the number of amenities in many condo and apartment complexes. Security issues abound with each additional “feature” and if these issues are not addressed properly by the board, lawsuits and claims could arise. Also, should the board vote to hire a security firm that is somehow negligent, the board is liable for its part in hiring that company. Mind you, the security firm itself bears the brunt of the liability, but there is still a risk to the association for the board’s actions.

 Make sure your association is covered.  Ask for a free policy review from an independent agent who specializes in condo association and homeowner association insurance. Coverages vary.  Amounts covered vary. There could easily be more comprehensive coverage available with better rates.  Do you know how your insurance company is rated?  Is it solvent or borderline? 

 If your association doesn’t currently have directors and officers coverage, you could be open to a financially crippling lawsuit.  Ask to have it added today!