Suing board members

Started by KarenH2 • 5 replies • 1972 views

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KarenH2
Posts: 5

Posted:

We are a very small self-managed condo association with only two board members. We do not have any D&O insurance to cover the board. What would happen if the board was sued for miss-management? Would they be personally liable for their decisions? When residents question some of their business practices they say it doesn't matter because they are there on a voluntary basis and not legally bound. Is this correct? I live in the state of Texas if that matters.

BruceS
Posts: 1

Posted:

yes the board members can be sued.
So to protect you in this matter you need to get in touch with YOUR home insurance provider, they can ad that coverage for a small fee.

BrianB
Posts: 2,787

Posted:

if the HOA is sued, then the HOA money is at risk.

If the board is sued, then HOA money is at risk

If the individual is sued, then his/her money is at risk.

odds are, the suit will name the HOA AND the individual, to cover all bases.

so yes, get insurance. the HOA should budget and pay for it.

RonaldW
Posts: 873

Posted:

The HOA should have insurance.

HaroldS
Posts: 902

Posted:

No way would I volunteer for an HOA board that did not have insurance. Harold

GloriaM
Posts: 820

Posted:

Karen:

The HOA should build into your annual budget D&O insurance to protect the volunteers serving the community. If you were sued without D&O the money to defend yourself could come from your own resources. Your home and personal assets could be at risk. Protect yourself and future boards by pricing out D&O insurance. I always recommend to all of our boards to have D&O coverage.

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