Can a director be sued by homeowners after his/her term of service?
Does D&O insurance protect only current directors or does it cover
former directors as well?
Yes, former directors can be sued for actions they took while on the
board. Unfortunately, too many plaintiffs (and
their willing lawyers) file lawsuits for dubious reasons. As a result,
it is important that boards purchase a good Directors & Officers
(D&O) liability insurance policy.
. D&O insurance covers current and past directors, provided
policy is "claims made" and not "occurrence" based. A claims made
policy means that coverage
is determined as of the date the claim is made, not when the alleged
act occurred. As a result, claims made against former directors would be
covered. Good policies broadly define "named insured." Attached is a
. Boards should check their policies to see how "named insured" is defined.
: Associations needing legal assistance can contact us
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