HOA Insurance

Started by BB5 • 4 replies • 1525 views

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BB5
Posts: 140

Posted:

Nothing in our insurance policy would cover the costs of a law suit by a member only liability for injury on the road or wellhouse lot is this unusual ? All homes are privately owned the road /roads are common or dedicated. As past Pres. I checked in to the coverage and found that because we are not condos this is all the coverage we can get.

SusanW1
Posts: 5,197

Posted:

No - ask your agent again for coverage for Directors and Officer's liability.

You have property liability, you also need board coverage. It's a must for non-profit board members to be protected from personal liability.

BB5
Posts: 140

Posted:

I did check and was told the only coverage pertaining to officers would be coverage for "the wrong doing" of an officer (such as stealing)from the treasury.

TimB4 (Virginia)
Posts: 20,986

Posted:

BB5,

D&O liability insurance protects corporate directors and officers in the event they are personally sued -- often in addition to the company being sued -- by investors, employees, vendors, competitors, and customers, among other parties. The insurance protects directors and officers by covering legal fees, settlements, and other costs; in addition, the coverage sometimes can extend to protect the company if it is named in a suit, as well.

However, you are correct in the fact that if a homeowner sued the Association for things like selective enforcement, willfully violating laws or to make the association comply with laws, the association will have to pay for those legal fees and any damages. However, if the Association wins in the legal action, the loser would typically be required to pay for the cost of those legal fees.

Win or lose, the Association will need to cover the expenses up front.

This is why it is best to comply with the laws and your governing documents.

Tim

LawrenceC1
Posts: 480

Posted:

Our HOA carries three kinds of insurance:

1. Commercial Lines Package Policy
Covers loss of, or damage to, property owned by the HOA from fire, weather, vandalism, and other unexpected perils.

2. Directors and Officers Insurance
Coverage for damages or defense costs as a result of a lawsuit for alleged wrongful acts by the officers or directors of the HOA while acting in their official capacity.

3. General Liability
Protection for the assets of the HOA and its members for lawsuits brought against the HOA arising from injury or property damage on the common property.

Any HOA that owns property ought to carry all three kinds of insurance.

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