QUESTION: Is Public Officials and Management Liability insurance the same as Director and Officers (D&O) Liability?
ANSWER: They are similar but not the same. Both are errors and omissions policies, i.e., they protect the insured in their decision-making. The primary difference between the policies is who gets insured. In the Public Officials policy, elected/appointed officials of state and local governments are the insured. A D&O policy, on the other hand, covers directors and officers of corporations. However, common interest developments need broader coverage than a straight corporate D&O policy.
Management Liability. D&O policies for community associations are designed like a management liability policy. That is to say, they typically include coverage for errors and omissions and fiduciary liability. Many also include employment practices liability, with others offering coverage on endorsement. In addition, they cover volunteers on committees and the onsite manager (if any). In other words, they are specifically tailored to the HOA industry.
Recommendation: It goes without saying that boards should talk to insurance brokers with expertise with homeowner associations. The last thing a board wants is to have a claim denied because they bought inadequate insurance.
ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.