D&O ins coverage

We have a basic D&O policy designed for start ups with a developer still evolved. Our Ins carrier recommends we move to a standard policy. The developer is long gone. Some BOD members challenge the recommendation.Cost!I tend to be risk adverse and want to upgrade the coverage. Plus, I rely on the Ins broker as a professional.Im quite uncomfortable serving as BOD with out adequate insurance coverage. I feel BOD candidates have a right to know they may be undercovered. I am assigned to get quote and info. Any thoughts or points on experience on this subject. I am one of five votes and need to present compelling info.

Cathy's advice is spot-on and good. Just wanted to add since cost is a factor, that payment options may be available. Our insurance company let us do 10 month payments. Which helped fit in the expense into our budget. Otherwise, some want a lump sum or 6 months. 10 -12 months lowers the payments.

Many HOA insurance companies like to "bundle" services. That may be confusing to some as we often like to pick and choose options. That may not be an option due to bundling. For example we did not own a "HOA vehicle". Our insurance had it in the policy to cover one. We could not take it out of the bundle. However, what the insurance then meant to cover was if a board member was in their personal vehicle and has an accident, the insurance could kick in to cover certain expenses. So if I was going to the bookkeeper's office across town and had an accident. My insurance would pay but I could claim my deductible with the HOA's insurance. So look at certain bundled services at a different angle than "Hey the HOA doesn't own a car".

I think board member should be covered by insurance. Some may even want to get additional insurance on their own with their insurance company. Especially when you have people who want to sue because a needle dropped on the ground and it put them at risk of stepping on it....

Another thing to evaluate is if you have coverages for HOA property like clubhouses. The price of replacement changes over the years. If your clubhouse was to burn down today, would the insurance cover 80% of the replacement costs? The members of the HOA would be on the hook for the other 20% plus deductible. So do a check on can your HOA afford what could be a $20K + expense for clubhouse replacement or raise the insurance coverages?

.... and if your paying on a policy that will never have to be paid out on, its a win for the insurance company. All profit, no loss.