Not all Directors & Officers Liability insurance policies are created equally.  There are no “standard” D&O policies.  gaps between quotes

As a result, doing an apples-to-apples comparison can be tough.  The chart below may help to quickly identify some major differences, provided your Agent has access to the carrier who offers them. Make sure these are available;

Typically, a stand-alone policy provides much broader coverage than an endorsement added to the association’s package policy. 

 A major exclusion on most D&O policies relates to the purchase of Insurance.  D&O policies typically will not provide any coverage for failure or omission on the part of the “insured” to affect or maintain adequate insurance of any kind.

Directors & Officers Coverages Available within a Stand Alone Policy

  • Is the association covered as an entity?
  • Does the D&O policy provide coverage for association past, present and future board members?
  • Does the D&O policy extend coverage to individuals working at the discretion of the board (e.g., volunteers, committee members, employees, etc.)
  • Does the D&O policy provide coverage for employees, management company and the manager provided by the management company?  (Definition of “insured”.)
  • Does the D&O policy provide coverage for the builders and developers serving on the board?
  • Does the D&O policy provide for and pay a lawyer (defense coverage) with the legal fees “outside” (means in addition to) the limit of liability and not subject to the deductible or retention?
  • Does the D&O policy provide defense coverage for non-money damage claims, e.g. claims seeking injunctive relief for a pet, parking, pool issue?  80% of D&O claims are non-monetary related.
  • Does the D&O policy provide defense coverage for allegations of discrimination?
  • Does the D&O policy cover defense costs associated with breach of third party contract claims?
  • Does the D&O policy provide for “full prior acts” coverage? (covers all acts going back in time)
  • Does the D&O policy pay on your behalf so you don’t have to wait to be reimbursed?
  • Does the D&O policy enable you to choose your own counsel?