home owners association insurance

Started by BarbK • 6 replies • 1805 views

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BarbK (Colorado)
Posts: 1

Posted:

Do the board members have to be listed and covered on homeowners association insurance plans? What are some companies we can contact for quotes for Colorado? We have one now, but are shopping for a better plan.

GeraldT4
Posts: 1,022

Posted:

BarbK - It's best to get advice regarding insurance from an insurance expert familiar with your governing documents and state law. The Association Board should have what's called D&O insurance for Directors and Officers of the Board. This will cover for errors not due to any negligence and protects both the community and those that govern.

Check out http://www.cohoalaw.com/governance-seven-steps-for-insurance-protection.html

MaryN (Virginia)
Posts: 125

Posted:

I'm confused! VA state law... the BOD individual officers can only be sued for the amount of their salary..our POA supposedly carries insurance that covers the board members..I don't understand why they would need it....our POA is being sued..does the insurance money cover the attorney's expenses?
MaryN

CoralF (Iowa)
Posts: 4

Posted:

Hey guys - not sure of the answers to the questions (about being sued for more than the salary amount, or legal fees, etc) but I'd suggest checking out http://www.homeownersinsurace.org - lots of good unbiased info on there.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

our POA is being sued..does the insurance money cover the attorney's expenses?

Depends... just like any other insurance policy there are many stipulations. If a board member committed fraud, etc, the insurance policy might not pay. Really depends on your insurance policy. It should state what it covers.

BarbaraD6 (Florida)
Posts: 347

Posted:

Mary,

What salary? The Board of Directors are volunteers and don't get paid.

Barbara

TimB4 (Tennessee)
Posts: 21,059

Posted:

Mary,

Where is that in VA law?

As for D&O insurance:

Directors and officers insurance provides financial protection for the directors and officers of your company in the event they are sued in conjunction with the performance of their duties as they relate to the company. Think of directors and officers insurance as a management errors and omissions insurance policy.

Every policy is different so you will need to check with the insurance company. However, legal fees could be part of the coverage.

Here is a good article about it: Nonprofit Directors and Officers Insurance: The Good, the Bad, and the Ugly

How to Determine Whether to Insure Directors and Officers Scroll down in the article to the section titled D&O 101

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