Risk & Business Magazine JGS Insurance Risk & Business Magazine Winter 2017 | Page 28

DIRECTORS AND OFFICERS COVERAGE
BY: SEAN M. AHERN, CIC, CIRMS
VICE PRESIDENT, JGS INSURANCE
Do Ya Know D&O?
What To Look For, What To Look Out For
S
o you’ve decided to volunteer your
time (and every third Wednesday
evening of the month) in the
management of your community
association as a member of the
governing board. That’s great, but you
need to be aware of the very real risks you,
your spouse, and your estate are assuming.
Residents admirably volunteer their time
to play an active role in the betterment
of their association, to help make sure
things are done right, to keep other board
members honest, and to have a positive
impact on the overall performance
and enjoyment of the community. But
functioning as a member of the board
exposes each trustee to liability from
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fellow residents, contractors, fellow board
members, and association employees, to
name a few. Lawsuits regarding breach of
contract, conflict of interest, libel, slander,
failure to maintain property, failure to
properly fund reserves, defamation of
character, and invasion of privacy are very
real exposures facing directors and officers
in association living. It’s enough to take all
the fun out of being a board member!
Just like directors and officers of large
corporations, directors and officers of
condominium associations, homeowners
associations, and co-ops need protection,
and lots of it. Today this protection is best
found in specially tailored Directors and
Officers (D&O) insurance policies and
umbrella liability policies. Board members,
managing agents, and even volunteers all
need to be covered.
The need for D&O insurance is perhaps
greater today than ever before, considering
the willingness (and often eagerness)
of association members to bring suit
over almost anything. But when board
members review the insurance coverage
expressly designed to protect them, they
typically are satisfied to see a D&O policy.
The difference between one company’s
coverage and that of another can be vast,
however, leaving multiple causes of loss
uncovered and many people unprotected.
Property and liability insurance is