Traditionally, a board of directors runs a homeowners association. This group of people usually consists of volunteers who live in the neighborhood. HOA directors and officers insurance protects these members from possible lawsuits related to their duties and actions.
Why Should You Buy D&O Insurance for Your HOA?
HOA board members are liable in legal claims involving a breach of contract or fiduciary duty. Directors and officers policies offer a way to lessen financial losses and mitigate risks when unexpected situations arise. Purchasing this protection also entices high-quality board members to serve their community in this capacity, knowing they have liability safeguards in place.
Which Community Members Does a D&O Policy Cover?
Often, directors and officers plans exclude people who do not own a home in the neighborhood. They typically offer protection for the following people:
- Board members
- Committee members
Is a D&O Plan Right for Your Association?
When determining if HOA directors and officers insurance is right for your community organization, consider the following questions:
- Does it cover both monetary and non-monetary claims?
- Which members does the policy protect?
- What are the most likely liability concerns in your community?
- What are the limits and deductible amounts?
Even though your HOA members are your friends and neighbors, you may still encounter legal issues related to your organization’s duties. Ensure your volunteers have protection to prevent personal financial losses by obtaining directors and officers coverage.