The Effective Board Continued ...
work situations , you will practice these techniques in role-play exercises . You will learn how to implement a six-step process for managing your encounters with difficult people more productively .
This is a four-hour course , which can be customized to meet the needs of your group . Please contact Mary Delmege at 760-504-7977 if you have any questions or you may register at http :// marydelmege . com / training .
Workshop Details September 12 , 2012 , 9:00 am to 1:00 pm
Melrose Law Center 380 South Melrose Drive Vista , CA 92081
Cost : $ 95
Ms . Delmege has mediated several hundred cases for businesses , community associations and neighborhood conflicts . She has a very high rate of success in helping disputing parties develop practical solutions to difficult problems . She also teaches mediation skills to adults and teens . Ms . Delmege is a member of the San Diego County Superior Court ’ s Civil Mediation Panel , the Southern California Mediation Association and the Community Association Institute .
In addition to her extensive mediation background , Ms . Delmege has served in a variety of management and advisory positions for the U . S . Commerce Department , including Southwestern Regional Manager and Senior Advisor to the Trade Promotion Coordinating Committee . She began her Commercial Service career as a Foreign Service Officer in Mexico City , where she directed market research and outreach activities .
Prior to joining the Commerce Department , Ms . Delmege served as Marketing Director for private sector firms specializing in industrial and automotive products throughout the United States and Mexico .
Ms . Delmege ’ s education and training includes :
• BA in Economics from Claremont Men ’ s College
• MBA from the Anderson School of Business at UCLA
• Senior Executive Fellowship from the Kennedy School of Government at Harvard
• Mediation Certificate , Gregg Relyea Esq .
• Mediation Certificate from North County Lifeline in Vista , California
• Mediation Credential from the National Conflict Resolution Center HOA
PETERS
ATTORNEYS AT LAW
&
FREEDMAN , L . L . P .
A full service lAw firm Experience you can rely on People you can trust
encinitas office
desert office
760 436 3441 760 773 4463
www . hoalaw . com • mail @ hoalaw . com
Directors and Officers Liability Insurance
By Michael Berg
So many times the question is asked , “ Is this covered by our Directors and Officers Liability policy ?”
Most people can easily wrap their head around the concept of property insurance : if property is damaged by an event ( peril ), and that peril is covered in the policy , the insurance company will pay the cost to repair the property .
But liability insurance , specifically Directors and Officers liability , is a little more cryptic . The full title of the coverage is Directors and Officers Errors and Omissions . The protection here is not necessarily for a particular event , but for an allegation others make toward errors in the decisionmaking process of the board .
Directors and Officers ( D & O ) insurance is a professional liability policy . Think malpractice insurance for an attorney . The coverage is used to protect the association when someone feels there was an error or omission by the board . For example , a common allegation is breach of fiduciary duty , wherein a board of directors allegedly failed to act in the best interest of the membership .
If a member of an association feels the board made a decision that adversely affected him / her , a claim against the association D & O policy is likely . Because almost every policy requires the carrier to defend the suit at the outset ( a duty to defend ), the cost of attorney ’ s fees are picked up by the carrier . The duty to defend language in most D & O policies actually requires the carrier to take control of the claim defense process , which is why the carrier will assign counsel in the vast majority of claims . Most carriers will issue a reservation of rights letter at the outset of the claim process . This means that the carrier will investigate and / or defend the insured , while still reserving the right to deny coverage in the future if the claim is ultimately not a covered allegation .
Like any insurance policy , there are specifically excluded allegations . Because of the nature of the policy , the exclusions are relatively minimal . Claims for bodily injury or property damage are excluded , as are claims for known wrongful acts . Most policies do not exclude , or will endorse ( add ) coverage for , employment practices ( wrongful termination ), failure to maintain adequate insurance , discrimination and defense costs for breach of contract . Review your policy , and consult your insurance professional and legal counsel for information about your specific coverage .
Once the defense is established , the investigation into the allegation will reveal 1 ) if the allegation is specifically excluded and 2 ) if there was indeed an error or omission . If excluded , the carrier will issue the denial , and the insured must provide for its own defense . If not excluded , then the investigation will continue into the actual alleged error or omission .
The discussion of the actual activity on the claim from this point to the payment of a judgment or a settlement far exceeds this article . Suffice it to say , the best protection for the board is to operate and make decisions within the Business Judgment Rule :
1 . Act in good faith
2 . Act with the care another person in a similar position would exercise ( i . e . be prudent )
3 . Act in the best interest of the association
Keeping this simple rule in mind , and understanding the limitations of your specific policy , will help ensure that defense of allegations will be provided by the D & O insurance carrier . HOA
Michael Berg , CIRMS , CMCA , MBA – Director of Operations for Berg Insurance Agency – Michael has been a licensed insurance agent and member of the Berg Insurance Agency for over ten years . After receiving his degree in Earth Sciences from the University of California , Santa Cruz , Michael worked for a local geotechnical firm as a Staff Geologist before joining the agency . Michael has since graduated with honors from Chapman University where he received his Masters in Business Administration . He is very active in Community Associations Institute ( CAI ) and California Association of Community Managers ( CACM ), currently co-teaching the insurance section of CAI Orange County ’ s Community Leadership Training Program , and serving on the board . He prides himself on providing service above and beyond what is typically expected , writing articles for association newsletters and attending membership meetings to answer questions and educate the memberships .
Berg Insurance Agency 23651 Birtcher Drive Lake Forest , CA 92630 ( 800 ) 989-7990 x216 Michael @ BergInsurance . com www . BergInsurance . com
6 | The HOA Board Quarterly | Issue # 3 | Summer 2012 Summer 2012 | Issue # 3 | The HOA Board Quarterly | 7