Archive for Directors & Officers (D&O)
Condominium Directors and Officers Liability
A condominium association is a legal entity of individual unit-owners who own their individual living spaces but jointly share ownership and responsibility for maintenance and upkeep of common areas. Condominium association bylaws are established under enabling statutes of each state and require management of the condominium by a board of governors or directors. Board members are usually (but are not necessarily) residents of the condominium and usually are not paid. While standards of accountability to others by unpaid directors of nonprofit associations are not as stringent as they are for directors of for-profit corporations, condominium directors must still meet standards of reasonable care. Defense costs can accumulate rapidly, even when a legal action is decided in favor of the directors. Condominium directors and officers liability coverage is similar to the corporate version. High limits are available but coverage is usually subject to a deductible. The premium charged is based on the number of condominium units.
Directors and Officers Liability: Financial Institutions
Financial institutions are one of the most difficult classes of directors and officers liability to insure because they are subject to significant regulatory and civil actions against their directors and officers.
Directors and Officers Liability: Nonprofit Organizations
This coverage protects the nonprofit itself, its directors and officers, employees, and even committee members. Some carriers include a limited amount of this coverage as part of their package policies. Trade, fund-raising, and research organizations, churches, fraternal organizations, and other nonprofit organizations are eligible. Farm co-operatives and hospitals are difficult classes for this coverage. Some underwriting factors to consider are stability of operations, length of time in operation, and whether the organization generates enough revenue to meet its expenses. Some companies cover employment practices liability. This coverage is written by:
Homeowners Associations (HOA)
Homeowners associations are nonprofit organizations made up of property owners who work together to govern and maintain jointly owned property. Community swimming pools, tennis courts, golf courses, and clubhouses are maintained for the use of members and their guests. Property owners pay fees for services the association renders to maintain these and other facilities, in addition to maintaining all common property. Property owners make up the boards that elect the officers. A manager is usually hired to make day-to-day decisions and hire workers who maintain the property. The board may purchase directors and officers liability coverage to protect it against wrongful acts to third parties and employees. In many cases, employment-related practices liability coverage is purchased to insure against wrongful termination, harassment, or discrimination of employees or third parties. Standard carriers write many smaller associations. However, excess and surplus carriers write the larger ones that have more extensive property and liability exposures.
Labor Unions E&O
This coverage indemnifies a labor organization for claims that result from actual or alleged negligent acts, errors, or omissions committed in the conduct of its business. Actions of local unions, district councils, state bodies, city or area councils, international organizations, apprenticeship committees, schools, and other organizations that the Department of Labor recognizes and regulates may be covered. Labor organization officers, former officers, executive board members, and union officials are insured against claims for loss that result from actual or alleged negligent acts, errors, and omissions in carrying out the organization’s business. Employees may also be covered as “union officials.” The coverage is written on a claims-made basis and has a retroactive feature that covers claims that result from activities performed prior to the inception date.
Mutual Funds Directors and Officers Coverage
Coverage is available for these exposures of mutual fund managers and investment advisers, mutual funds only, mutual funds and investment advisors, or investment advisors only. A combined package of coverages provides full directors and officers and full errors and omissions coverages on a claims-made basis. An optional extension period may be purchased if the insurer cancels or nonrenews.