REQUIRED LEVELS OF D&O INSURANCE

To avoid personal liability in excess of the association's insurance limits, boards must maintain at least minimum levels of D&O Insurance for associations with 100 or fewer separate interests and for those with more than 100 (see Civ. Code §5800(a)(4)). Additional insurance coverage can be added through umbrella policies at very reasonable costs. Also see occurrence v. aggregate.

Limits on Protection. Protections against personal liability are limited as follows:

• Exclusively Residential. Protections are for volunteer officers and directors of associations that are exclusively residential. (Civ. Code §5800(a).)

• No More than Two Units. Protections are not available for volunteer officers or directors who own more than two units. (Civ. Code §5800(e).)

Recommendation: Due to the litigious nature of California residents, boards should obtain more than just the minimum levels required by statute.

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