Directors and Officers Liability Insurance

All, I have used the "search" box on this site (before posting a duplicate question) and found information on DOL insurance, but it also raised more questions/issues for me.

... response from Roger in 2005

JohnA, regarding broad D&O (Professional Liability)insurance I suggest you contact a State Farm, and others who specializes in association insurance. Watch out for exclusions. Cover current and past directors, committee members, manager, and association. After getting bids, I suggest you try to get the selected Agent to come talk to your Board to present and answer questions. Then let the Board make their decision.

The statement "cover current and past directors, committee members, managers, and association.." raised an important question for our Association. As I have mentioned, we moved from developer control to owner contol board. I do not want to be "adversarial" but I also do not want to sheild the developer board from potential actions that may rise from the transitioning of the community to owners. Example, if a developer director did in fact commit a clear breach, then wouldn't they be "protected/shielded" from liability, if we extend coverage to "past directors, etc...?"

I have tried to create a "screen" between our actions as owner board, from those associated with the developer board. Under "normal" circumstances, there is "transition" between the two entities, where they work together, however that has NOT been the case here - we had the baby dropped in our laps, with only a nametag, few diapers, and day old milk....

Roger, Thanks for the information - my concern is/was rooted in the fact that the developer, and developer board entered into a "indemnity agreement" raised by multiple liens placed against a common property structure by multiple contractors who were not paid. The issue for me as current president is that this agreement, was NOT reviewed by association counsel, prior to signing. While the agreement in itself is/has standard language there are a few sections that would have benefitted a good legal "scrubbing" (review) but association counsel. However developer and developer board (hard to determine where the appropriate "screen" exists) did not consult, nor even inform association legal counsel - they were informed a month later via developer's counsel. I plan to sit down with the parties, and discuss this matter further (and of course as you suggested, investigate our DOL insurance, to assure that past actions are not necessarily covered, but that the current owner board has sufficient coverage from this point forward).

Again, to ALL here, a sincere THANKS this site has offered some very valid and balanced advice that will allow me to enter into board activities with confidence.