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Insurance matters for condominium associations

On Behalf of | Jan 4, 2024 | Insurance Disputes

One of the main reasons buyers choose to purchase homes in communities governed by some type of homeowners’ association is the structure and organization provided by it. These associations often oversee the look of the neighborhood, enforce rules, take care of common areas and protect the community’s home values. These governing bodies are particularly important in New York condominium neighborhoods, and board members often have the unenviable job of enforcing rules and implementing regulations.

In a condo community, there are connected homes, and neighbors may share common spaces, storage and driveways. The enforcement of rules is critical as it allows homeowners to reside peacefully and without problems. However, this is not always easy, and condominium associations may face challenges from owners over rule enforcement and other matters. This sometimes comes in the form of a lawsuit, which can ultimately be costly for the COA board members.

Insurance to protect the association

Condominium associations may be subject to lawsuits from unhappy residents, and these claims often name one or more board members in the lawsuit. Those specifically named in a lawsuit may be financially responsible for any damages awarded from the lawsuit, making it especially important to have the proper insurance coverage. Community Association Directors and Officers Insurance can provide protection for these individuals, who are often unpaid volunteers, and it is critical for each COA to have this type of coverage.

D&O insurance can provide coverage for board members in different circumstances, which can include lawsuits over breach of fiduciary duty, employment liability, discrimination, misappropriation of funds and more. By having this type of coverage, board members can feel confident that they can proceed with the necessary decisions they need to make without fear of catastrophic financial loss and complex legal difficulties.

Protection benefits everyone

D&O insurance provides confidence and protection for board members who are simply trying to help their communities. The function of a COA improves when those involved with its day-to-day function do not face exposure to the threat of lawsuits by unhappy homeowners. In turn, this allows the board to operate as intended, which is beneficial for all residents of a condominium community.


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