Director Coverage Insurance

I don't know if they are but I sure hope so I'm tired of our board/officers hiding behind the HOA to harrass and intimidate people who speak up.

In most states directors have qualified immunity from lawsuits: they are immune only so long as they act as an ordinarily prudent person would under similar circumstances.

By definition, a prudent person does not violate the law. If your state laws require the board to allow you to speak at board meetings and the board has denied you the opportunity to do so, then the board members are not immune from suit. Other actions, such as enforcing some rules against some persons and not against others may be within the discretion granted under the business judgment rule and the board members would be immune from personal liability for those acts.

You should be aware that even if the board members could be held personally liable that their insurance company may nonetheless defend them. The insurer has a higher duty to defend than it does to indemnify.

Your CC&R's may give you the right to enforce the covenants through private court action. If you feel that you or some other person is being cited for violations while others are allowed to commit similar violations, your remedy would be to take the other offenders to court.

One thing that is often overlooked in these discussions on directors' immunity is that the immunity does not extend to the officers of the corporation. For this reason I always recommend that board members elect/appoint/hire officers from outside the board. If a person is a board member and also an officer, his immunity exists only for those acts he takes as a director. Once the board meeting is over, he is personally liable for any wrong that he does as an officer.