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HOA Insurance - Directors and Officers (D&O) Liability Insurance


Every director and officer of a homeowner association board has personal responsibility for HOA business. The basic purpose of Directors and Officers insurance is to protect directors and officers from claims made because of wrongful (or allegedly wrongful) acts or omissions made while acting in their individual or collective capacity on behalf of the homeowners association.

General liability insurance will not protect directors and officers in the same way. This insurance is to cover against third party bodily injury and property damage. Directors and Officers insurance covers against third party financial damages and other claims not covered under General liability.

Here's a list of scenarios in which directors and officers have liability:

  • Continuing a wrongful practice after learning it's wrong

  • Libel or slander

  • Failing to pay HOA debts in a timely manner

  • Improper management resulting in losses

  • Receiving personal gain while performing as director or officer

  • Making decisions based on adequate information and advised judgment

  • Ignorance of HOA books and records

  • Verifying content of official documents before signing

  • Obedience to the governing documents

  • Self dealing

  • Aiding and abetting illegal actions of others

  • Conflict of interest

  • Carelessness in conducting business or legal matters

  • Failing to see what could be seen by merely looking

  • Inducing intentional or careless wrongdoing

  • Ignoring statutory or regulatory requirements

  • Insufficient oversight of officers or employees

  • Nondisclosure of questionable or unlawful actions

  • Willful wrongdoing

    Because of all these traps and pitfalls a director or officer could fall into, D&O insurance should never be optional. No one should serve on a board without it unless, of course, you have absolutely nothing to lose. I personally don't know one person that doesn't. Do D&O.

  • What is a condo association master insurance policy?

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    So is this the type of insurance a board is to keep if they make a major mistake? Let me give you an example. Let’s say a home owner has water damage due to a failed water pipe in the common areas of the building, this pipe is an individually metered line for only one of the units and NOT a common line. 
    1. The home owners insurance will only cover plumbing problems inside the load baring walls of his unit and not the utilities lines to the unit outside. 
    2. The board collectively refuses to allow the home owner to fill a clam with HOA insurance stating that the utility line that provides “exclusive service” to the home owners unit are the owner’s responsibility and not the HOA. (Even thou there policy will cover it, there trying to save money by not filling a clam ) 
    3. The home owner sues the board for damages and for failing to allow them access to the insurance (that THEY are paying into every month) to cover costs. 
    Is this the type of use of this policy? And also can this result in an immediate cancellation of the policy by the insurance company because they feel the board is engaging in “high risk” behavior? 

    posted @ Friday, August 21, 2009 11:23 AM by Wolfmanjeffrey

    our condo has 93 units & ~budget of ~200K. 5 Directors are paid $165/mo. No one is a lic. CAM. Appears violation of FS 468.431 & 61B 23.001. I am not on board. 
    D&O insurance valid??? I see my condo owners ins HO 6 would exclude

    posted @ Saturday, October 31, 2009 12:58 PM by brent wenkstern

    If a board member reports the management company for wrong doing (no master insurance-didn't pay bill -3 months laps)to the state on their own- and the management company trys to sues the individual- the board says they did not authorize that person to report the company- 
    is that director still covered under the D&O?

    posted @ Thursday, October 21, 2010 9:01 AM by LYNN

    Will HOA D&O policy cover employment practices liability, i.e. a wrongful termination suit?

    posted @ Wednesday, March 30, 2011 9:47 PM by s kimbgall

    I live in an HOA in Calif. When I moved in to my home in 1999, I was aware that the roof needed to be replaced. My preference was to install a Composition roof, however my HOA, at that time, did not allow that roofing material. The HOA limited my options to a couple of roofing products that were relatively new to the market, in other words, had not stood the test of time. Given that I was not allowed to install the composition roof, I was forced to choose one of these unproven products. In keeping with the HOA architectural committee recommendation I chose a product called 'FireFree'. In 1999 my new roof cost apx. $20,000. It began to fail within about 3 years, mind you this was reportedly a "lifetime" or 50 year roof. When I tried to contact the roofer for assistance, I learned that he had filed for bankruptcy. I also tried repeatedly to pursue the manufacturer, Re-Con Builders, however I was met with excuses and endless delays an excusdes until I learned that left the country. I have also become part of a second phase of a class action suit against the manufacturer, however this is a painfully slow process. Now my HOA has given me an ultimatum, given the horrible state of disrepair of the product they required I use. I now have been given 15 days to respond to their complaint that I am in Non-compliance with the current CC&R's. They NOW have approved the composition roofing materials that I requested to use in 1999, which IF I had been allowed to use that product, I would STILL have a fully functional roof. The financial burden is expected to be all mine. I have had one bid so far and I am again looking at a cost of about $20,000 personal outlay of cash, yet again. I would like to know if I have any legal recourse against the HOA. I am aware that usually an HOA has Directors and Officers Liability Insurance. Question: Would my case be covered under an 'improper' management or requirement, or in a decision making and advisement arena, or perhaps a carelessness in conducting business in that the acting directors and decision/policy makers at that time did not do their due diligence in the recommendation of a required product. I thank you for your time.  
    Kathy Gunz

    posted @ Wednesday, July 27, 2011 2:37 PM by Kathy Gunz

    Your Blog is very good, I like it! Thank you for your sharing!

    posted @ Wednesday, October 12, 2011 3:23 AM by Canada Goose Coats

    If you have not obtained any help yet regarding the roof that you await the manufacturer to reply and that the board is holding you responsible for nonrepair, perhaps you can tell me of which county you are in? I can be reached at

    posted @ Sunday, November 27, 2011 5:36 PM by BETP Inc.

    Great review.

    posted @ Friday, December 23, 2011 6:39 AM by holly hooper

    In NYC, can you tell me whether the individual serving the board pays out of pocket for D&O insurance in a Condominium complex or does the board pay for it? 
    I heard that the board members were not supposed get "favors", so would this consider a favor to a board member? 

    posted @ Saturday, July 07, 2012 9:05 AM by Dave lith

    I would like to know whether the October 2010 posting by Lynn has been answered by anyone? Or whether Lynn has been sued by the management company? I can offer some comment relevant to California environment. 
    BETP Inc. 

    posted @ Sunday, July 08, 2012 12:47 AM by BETP Inc.

    Live in a summer community in Massachusetts that has a loosely structured association. (60 cottages) The association owns the beach, the roads and a parking lot. How much insurance shoulda the directors and officers have? $ 1 million, $2 million, 
    $5 million worth of coverage? Thanks for the advice

    posted @ Wednesday, June 05, 2013 6:09 AM by Char

    Does HOA insurance also cover visits to dentists in Medicine Hat? I've been wondering about this for quite some time.

    posted @ Wednesday, July 24, 2013 11:49 AM by Charles Nelson

    I don't think that HOA insurance will cover dentist services. You would want dental insurance for that one.

    posted @ Friday, September 20, 2013 2:28 PM by Charles Nelson

    No, HOA insurance will not cover dental, it is just for houseing purposes.

    posted @ Thursday, October 10, 2013 10:20 AM by Elisa Jed

    Comments regarding D & O Insurance are very helpful. My question is regarding someone the board appoints as an agent for them. i.e. Is a person who has volunteered to be on a Florida Condo Fine Committee to assist with the follow through of our Rules & Regulations. Are Fine Committee persons covered under the D & O Insurance or are they covered under a different section of our condo insurance should they get suited by someone who has been fined? Our FL Condo Bylaws states that "their shall be a committee of other unit owners" appointed by the board to listen to case and make decision based on evidence and the accused owner is allowed to present evidence, then final decision is made and carried out." No where does it said the this particular duty is covered by D & O Insurance. It does state in our bylaws that Directors, Officers, and Agents of the association are covered. Would Fine Committee be considered an "Agent"? They do not deal with the collection of the fine. No monies pass their hands. They base an opinion on evidence and set a fine according to FL Statutes. The Board then follows through by reporting to Management who then handles the fining and receiving of money. Thanks

    posted @ Tuesday, November 12, 2013 8:45 AM by Maggie

    I've never heard of HOA covering dental insurance. It would be nice, but I can't even think of a scenario where HOA would pay that out. I think you'll have much better luck trying to get that dental coverage through work.

    posted @ Friday, August 29, 2014 8:25 PM by Sam Gibson

    What would qualify as a injury caused by my condo? We had a neighbor fall off our roof and his injury wasn't covered. I wonder what actually has to happen for your case to be covered.

    posted @ Thursday, September 11, 2014 9:19 PM by Chevy Jones

    Last year I was in a terrible flood. I needed a service to remove the water and deal with damage. Because of the water, we had to also deal with some mold. It was a nightmar e!

    posted @ Thursday, September 18, 2014 9:37 AM by hanna

    Some HOA's combine health insurance group policy's into the dues. If that is the case, it still is a matter of whether they chose to include dental in the plan or not.

    posted @ Tuesday, September 23, 2014 7:43 PM by Radlie Hunter

    I think liability is a crazy thing. But, it is so necessary. You never know what is gonna happen. My brother owns a complex and he had to jump into his twice last year.

    posted @ Wednesday, September 24, 2014 7:30 PM by Guy Miflin

    These all look like really helpful things that can be included in insurance! I just joined the board for our condo association, I think I will check and make sure that we have insurance. Then we won't have to worry much about these things, and we can hopefully not be liable for various things happening. If we don't have it, I think it would be good for us to get the insurance as soon as possible!

    posted @ Wednesday, January 21, 2015 5:46 PM by Grant Harper

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