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When Are You Not Covered by Your HOA’s D&O Policy

Directors and Officers liability insurance (D&O) provides coverage in the event of a lawsuit claiming an association board or individual director’s 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 or Director. 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 the 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



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