When legal matters arise for HOAs, it’s important to have the proper coverage. Instead of just choosing the first option you’re given – or worse, not having any coverage at all – do a bit of research to see what insurance best fits the needs of your HOA. Additionally, it may even make sense for your HOA to have dual association liability insurance, being covered by more than one type at a time.
Directors & Officers (D&O) Insurance
D&O insurance is meant to specifically protect directors and officers of an HOA. Legal claims that are made against the HOA’s members are covered under this type of insurance, as long as they are made while the member is serving the HOA. In some cases, D&O insurance will also cover some legal fees or other costs associated with the legal claim.
Errors & Omissions (E&O) Insurance
E&O insurance protects the HOA organization as a whole when claims arise that alleging that the HOA failed to uphold their duty somehow. This can also include claims that the HOA did not provide sufficient professional services. Additionally, this coverage can also mitigate financial or other negative consequences of any services an HOA provides. In this case, every representative of the HOA is covered, not just the directors and officers.
According to Kevin Davis Insurance Services, dual association liability insurance may be right for you if you want to make sure all aspects of your HOA are covered. The increased costs may put some HOA owners off, but it’s worth the peace of mind.