Directors & Officers Insurance

Directors and Officers liability insurance (D&O) provides coverage in the event of a lawsuit claiming some Board or individual Directors’ act or omission.  D&O insurance does not protect the association when a claim is made for personal injury or property damage as a result of negligent actions of the Board of Directors.

Personal injury and property damage claims generally fall under the general liability policy of the association.

However, if a Board or individual Director knowingly violates the association’s governing documents or applicable law, D&O insurance will not generally provide coverage.

Each Board member is expected to act in good faith and in the best interest of the association. A board member is obligated to apply diligence, obedience and loyalty in the performance of his or her authority.  With this authority comes these possible grounds for a lawsuit.


Conflicts of interests


Mismanagement of funds


Irregular attendance at board meetings


Unwarranted salaries




Misstatement of financial condition


Misleading statements


Discretionary practices




Actions beyond granted authority             WDPM


Copyright – William Douglas Management, Inc. 2016