It is a fact that all Homeowner Associations need insurance, but depending on your location and specific needs, the type of insurance may vary. Attaining the correct type and amount of coverage is an important responsibility of the HOA Board of Directors to ensure that the HOA is covered in all cases. Here are the three main reasons our HOA clients have been sued and type of coverage needed in each case. Discrimination The governing documents of many HOAs and community associations give board members the right to make decisions on whether to rent or sell a house to someone. However, these decisions must always be carefully made as to not appear discriminatory based on color, race, sex, religion, familial status, national origin, disability, etc. Should someone feel discriminated against, the Directors an Officers (D&O) portion of your coverage may protect them against financial loss resulting from the claim. Maintenance Neglect If a homeowner asserts that the HOA is not meeting its obligations for common area maintenance and repair, it can be subject to litigation. Some cases may be outside of the HOA’s control and case a delay in regular upkeep such as conflict with a maintenance provider’s contract or a natural disaster. Whatever the reason, the HOA’s D&O coverage may help protect against financial loss in the event of a claim. Election and Board Decision Disputes When residents feel they are not being represented properly, they are well within their rights to dispute board decisions or election results, which can lead to lawsuits that can be time-consuming, expensive and exhausting. This is another area where D&O coverage can help protect individual board members from claims against them.
Some insurance policies come with a D&O policy attached. However, just because your HOA is adequately covered does not individual board members are likewise covered. It is important to look closely at your current coverage plan to find out if D&O is included as part of the package. If not, check to see if the policy can be added or if you need to purchase a separate policy.
Although it may seem difficult to add another policy premium to your yearly budget, the cost of not having D&O insurance can be much higher. The plans are usually flexible, allowing an HOA to purchase the amount of coverage needed for the size of an HOA.
About Gena Trust Insurance Agency
The Gena Trust Agency has built an impressive reputation as a leader in the insurance industry by providing excellent customer service designed to elevate her clients’ insurance knowledge and practical understanding of how their coverage works to protect them, their families, businesses, and assets. Our owner, Gena Trust and her team take pride in getting to know our clients, understanding their needs, and helping them choose the coverage they need without over extending their budgets. To learn more about our agency or make an appointment for a free insurance consultation, contact us at 770-864-5134 to speak with one of our representatives.