Directors & Officers (D&O) Insurance for HOAs
Guardian Insurance Agency
Guard your board. Guard your community.
Homeowner association boards make hard calls—budgeting reserves, enforcing CC&Rs, approving architectural changes, selecting vendors, managing assessments. When those decisions are challenged, claims target individual board members, officers, and the association itself. D&O insurance helps pay defense costs, settlements, and judgments for alleged wrongful acts in how the HOA is governed.
Why HOAs need D&O (beyond “regular” D&O)
HOA claims often seek injunctive relief (not just money), allege breach of fiduciary duty, or claim discrimination (Fair Housing), defamation, wrongful foreclosure, or failure to maintain common areas. The right HOA D&O form should:
- Cover non‑monetary claims (injunctions, orders to act/stop).
- Include community manager/management company as an insured (or by endorsement) when acting on behalf of the HOA.
- Address “insured vs. insured” issues (e.g., claims by owners against the association/board).
- Extend to volunteer board members, committee members, spouses, and past/future directors.
- Offer Side A protection for individuals if the association can’t indemnify, Side B reimbursement to the association, and Side C entity coverage (where applicable).
What HOA D&O typically covers
(Coverage varies by carrier and policy wording; we’ll tailor limits, retentions, and endorsements.)
- Wrongful acts in governance: alleged mismanagement, breach of fiduciary duty, failure to enforce or improper enforcement of CC&Rs and rules.
- Errors and omissions in board communications, meeting minutes, and notices.
- Misstatements/omissions in budgets, reserve studies, or financial reporting.
- Failure to maintain common area (governance-related; BI/PD belongs under GL).
- Defense costs, settlements, and judgments (usually claims‑made and often inside limits).
Common exclusions (know the boundaries)
- Criminal acts, fraud, personal profit, intentional wrongdoing.
- Bodily injury / property damage (general liability responds).
- Professional services outside board governance (property manager E&O may apply).
- Contractual liability assumed beyond the association’s normal duties.
- Prior or pending litigation before the policy’s retro date.
We’ll help align your GL, Umbrella, Crime/Dishonesty, and Cyber with D&O to avoid gaps.
Key mechanics to understand (for boards)
- Claims‑made coverage: The policy responds when the claim is made, not when the act occurred.
- Retroactive date & prior acts: Keep continuous coverage; avoid gaps when switching carriers.
- Extended Reporting Period (Tail): Useful after turnover, mergers, or policy cancellation.
- Duty to defend vs. indemnity: Some policies appoint counsel; others reimburse approved defense costs.
- Defense inside vs. outside limits: Inside limits reduce available indemnity as defense costs accrue.
- Consent to settle / hammer clause: Understand how settlement decisions impact coverage.
Typical HOA claim scenarios
- Owner sues for selective enforcement or failure to enforce CC&Rs.
- Board denies architectural request; owner seeks injunction.
- Alleged breach of fiduciary duty tied to underfunded reserves or vendor selection.
- Wrongful foreclosure or improper lien process.
- Fair Housing or discrimination claims related to accommodation requests.
- Defamation stemming from board communications or newsletters.
What influences cost for HOAs
- Number of units and common area exposures (pools, gyms, gates).
- Claims history and litigation profile (past disputes, foreclosures).
- Governance practices (clear procedures, documented enforcement, ADR use).
- Financial health (reserves, assessments, delinquency rates).
- Manager involvement and contract terms.
- Limits, retentions (deductibles), and special endorsements (non‑monetary coverage, manager inclusion).
Helpful options & companion coverages
- Non‑monetary claims coverage (critical for HOAs).
- Community manager inclusion (insured/endorsement).
- Outside directorships (if directors serve elsewhere on behalf of the HOA).
- EPLI (employment claims if HOA has employees or hires/terminates staff).
- Crime/Employee Dishonesty (treasurer, bookkeeper, third‑party theft).
- Cyber Liability (owner data, portals, payment systems).
- Umbrella/Excess to extend limits over GL/D&O (where available).
The Guardian way (for boards and community managers)
We review your bylaws/indemnification, management agreement, reserve plan, and claim history. Then we structure D&O with the right “Sides,” limits, and endorsements—including non‑monetary coverage—so your volunteers can govern with confidence and your community stays steady.
Guardian Insurance Agency — Proper protection—prior to peril.
Call
123-456-7890
abc123@xyz
Visit
Add Your Location Here