D and O insurance (umbrella's)

Our HOA indemnify's each of our board members for 1 million dollars. Several of us felt it necessary to get a larger personal umbrella since the Class Acton hit our fair community. When I was on the board I increased my personal umbrella to 3 Million, separate from the HOA insurance. I paid the preminum myself. since it would be for my personal protection as well.

Our board Vice Pres. (acting as Pres.) charges our HOA each year for his extra personal umbrella coverage. I believe he has increased his personal coverage to 5 mill. Then sends the bill to our HOA, and we pay the fare. This year the cost was $1,083.00. Since that coverage would benefit him in a personal claim that does not seem right~ why should we be paying his personal insurance. He is a family law attorney, and should take care of his own personal insurance.

I welcome any comments, on how this is handled in other HOA's

Nancy M.

Brad, Thank you for your posting. I agree with you. I was wondering how large your HOA is ?(how many owners) and have you had many law-suits ? I would think 2 million for board members is more realistic. But should be even handed.

Nancy M

Nancy:
My experience, from being off and on a board, is that D&O insurance is a costly, and useless insurance. Liability is important to the assn., but D&O is only for the directors and officers and only if good if they are being sued for a mistake they've made as an director or officer. In a suit against them for anything, the insurance company will not pay without a huge fight. My personal recommendation would be for an association to not have D&O and if a suit is necessary, sue the director(s) individually. For instance, D&O actually gives directors a sense of security that they can abuse their positions with their power. Believe me, it happens. Then the ins. co. argues over whether it's intentional or accidental, etc. Of course it's intentional--they knew they were insured. What a crock!
EdR

If you are on a board, you'd be wise to make sure you have homeowner's insurance. People who have experienced dealing with D&O know to sue individually. I know it's difficult to get people to be on boards but it isn't because of insurance or lack of insurance, it's because a lot of boards are into conflicts of interest, nepotism, back-scratching, etc. and it isn't fair for homeowners to pay for them to be protected from their wrongdoing. Further, I'm not the one allowing my association properties to get trashed and devalued and not doing anything about it because I'm afraid the people I've protected from having to abide with CC&Rs will get angry. I've been on a board; we had D&O, they still do--they'll fight for the board and pay the attorneys, but not if someone goes after you personally. My insurance company will sell me any kind of insurance I request and it's a good deal. We'll agree to disagree.
EdR