Your Neighborhood Law Firm

Does your HOA or nonprofit need D&O insurance?

Disputes with homeowners can quickly escalate into contentious litigation. This litigation can arise in the nonprofit sector, too. This, in turn, can threaten you and other directors, officers, and board members with extensive costs.

If you improperly handle the issue at hand, then the results could be catastrophic for the organization or homeowners’ association and individual board members, directors, and officers. So, what can you do to protect yourself and the interests of your HOA or organization?

Is director and officer liability insurance right for you?

Even if you’re merely a volunteer with a nonprofit organization or HOA, you need protection from litigation. One way to achieve this is to secure director and officer liability insurance.

One of these policies can reimburse HOA or nonprofit directors and officers for costs associated with defending themselves in litigation.

However, this insurance can also help cover the organization’s expenses, too. This can give you peace of mind, as it could protect you and your organization from financial ruin in the event that you’re held liable.

Considerations when securing D&O insurance

Not all insurance policies are created equal. Therefore, if you’re considering this type of insurance, then you’ll want to analyze each of the following:

  • Whether past board members, directors, and officers of the organization or HOA are protected under the policy.
  • Whether the policy covers attorney fees in addition to any judgments against the organization and its individual members.
  • Whether the policy covers the property manager.
  • The breadth of the policy, such as whether it covers employment issues like wrongful termination or discrimination.
  • Whether the policy covers actions related to contractual relationships.

Know how to protect yourself and your organization

Navigating the insurance world is complicated, especially when the time comes to file a claim and recoup your losses. If you’re facing a legal issue, including one involving your HOA or nonprofit’s insurance company, then you might want to think about seeking out additional guidance so that you know how to competently move forward while protecting your interests.