Spring is in full swing, and many property owners are visiting their neighborhood home improvement stores to gather supplies for seasonal projects. Meanwhile, many community associations are hiring landscaping contractors for lawncare, completing beautification projects around the neighborhood and opening the community pool.
Did you know all of these tasks could increase the potential for directors and officers (D&O) claims against the community association boards you insure?
Boards are susceptible to claims arising from improperly built structures, accusations of fund mismanagement for beautification projects, alleged breaches of contract from contractors, and employment-related lawsuits from pool employees. These scenarios emphasize the need for boards to have a comprehensive community association D&O policy that includes:
- Coverage for monetary and nonmonetary claims
- Defense against breach of contract claims
- Employment practices liability coverage
Without these important coverage features, associations may be on their own to pay legal fees — and board members’ personal assets could be on the line.
Consider this claims example:
Parents secure their community association’s pool and clubhouse for their child’s 10th birthday party. They followed the proper procedures to secure the clubhouse space and made sure the board knew they would be hosting a large group of over 75 guests. The party fell on a sunny day, which also brought many members of the association to the pool that day.
However, not all the scheduled lifeguards showed up for work, resulting in the pool becoming out of compliance based on the ratio of lifeguards to swimmers. To maintain the safety of all patrons, the lifeguard asked the parents hosting the party to have their guests return to the clubhouse until they could secure more lifeguards.
The parents, not happy about the situation due to the money they paid to throw the party, asked for an alternative solution. As tensions rose, the father used some choice words with the lifeguard, who in return made a derogatory remark, noted that guests had been breaking pool rules and firmly stated the party needed to leave or the authorities would be called.
The family refused to leave, and the police were called to the party. In the end, the family sued the community association, the board and the lifeguard for harassment and religious discrimination. They demanded to be reimbursed for over $150,000 they alleged they spent on the party and the pain they endured being emotionally distraught in front of other members, family and friends.
When the board received the lawsuit naming each person on the board, they were shocked and didn’t know where to turn. Thankfully, they had a quality D&O and employment practices policy with USLI that gave them an expert defense attorney and claims adjuster to navigate the situation.
How USLI can help your D&O book blossom
We pride ourselves on our stability, comprehensive coverage, competitive pricing and unparalleled service. We have a streamlined process and features that make D&O an easy, profitable coverage for you to write.
- A one-page application
- Pre-filled applications included with the quote
- The ability to quote off any application
- Multiple versions of the quote for effective, professional presentation
- Multiple quoting options to make doing business easy:
- Email our team
- Quote online by logging in to USLI.com
- Call us at 888-SPD-USLI (888-773-8754)
