Being on the board of a community association is no small task. You donate your time and energy to help your community and are rarely thanked for your efforts. The last thing you need is a Directors & Officers (D&O) policy that leaves you exposed in the event of a claim.

 Not all D&O policies are the same, and it is important for board members and property managers to understand the differences. A D&O policy protects the board of directors and, when written properly, should also include the property manager as an Additional Insured. A strong policy should provide coverage for prior acts, non-monetary damages, libel, slander, defamation of character, discrimination, sexual harassment, wrongful discharge, and third-party breach of contract claims.

 In most cases, a stand-alone D&O policy, separate from your Property & General Liability Package, is the better option. Stand-alone policies are typically more comprehensive and provide broader protection. The least you can do as board members is make sure you are adequately insured.

 One of the best ways to reduce the risk of a D&O claim is to remain consistent in your decisions and treat all residents fairly. Making an exception for one person can set a precedent, and failing to apply rules consistently may lead to a discrimination claim against the board. Lastly, always follow your governing documents and house rules.

 Check with your insurance broker today to ensure that you are properly covered.

 Eric Eggert, CIC, CIRMS, is an insurance consultant with Mackoul Risk Solutions. He may be reached at eeggert@mackoul.com.