Serving on a community association board is often a thankless job. In addition to the long hours and low pay (ok, no pay), there are myriad problems that a board member has to deal with. The governing documents (hopefully) spell out the board's responsibilities for the association. If something goes wrong, most associations have Directors' and Officers' insurance ("D&O Insurance")1 available to protect individual board members. D&O policies are meant to cover any "wrongful acts" committed by board members. While the term "wrongful acts" may sound sinister, the definition typically includes "any negligent acts, errors, omissions or breach of duty committed by an insured in their capacity as such." Hopefully, when a board or individual member of the board neglects to undertake a given responsibility, the D&O Insurance will provide a safety net. But what if one of those responsibilities is buying insurance in the first place? Nearly all governing documents for community associations require the association, through its board of directors, to purchase various types of insurance. Depending on the language of the governing documents, the required insurance may apply to common property, unit owner property, and the liability of the association, board, and unit owners. Obviously, if the board neglects to purchase D&O insurance, there is no safety net anyway. But what if the board either purchases the wrong kind of insurance, or no insurance, for the property and/or liability of the community as required by the governing documents? Surely, that would qualify as a "negligent act, error, or omission" of the board, wouldn't it? In the real world, the answer to that question is certainly yes. Unfortunately, insurers have closed the door on this type of claim. There is a standard exclusion in D&O insurance, which excludes "any failure to effect, maintain or procure any insurance policy or bond, including any failure to obtain proper amounts, forms, conditions or provisions on any insurance policy or bond." While D&O insurance does offer a safety net for board members in some situations, that net will be abruptly yanked away when it comes to purchasing the right insurance. Board members should pay special attention to the insurance requirements of the governing documents. If necessary, they should consult with their broker and/or their association attorney. If they don't, they are walking a tight rope without a safety net. 1. D&O insurance shouldn't be confused with Errors and Omissions ("E&O") insurance. The former is meant to cover directors and officers of an entity for their wrongful acts. The latter is typically meant to cover companies and their agents in the rendering of professional advice or services. read more

I was out on a walk one day when I noticed a turkey in my neighborhood—it was roaming free in an unfenced yard. I saw the turkey during the first part of fall and noticed that the turkey remained after Thanksgiving (admittedly, I am not certain it's the same turkey, but I believe so). At one point, I wondered if the turkey was a pet. read more

Spring is finally here! Along with the change in season come longer days, warmer weather, baseball (how about them Mariners!) and community association board elections. If you are a board member, or manager, of an association with a newly constituted board of directors you have an opportunity to take a simple step that will set up your community for success in the coming year. It is a one-time action that is guaranteed to continue to pay dividends for at least the next 12 months. Best of all, the process costs nothing (other than 3 – 4 hours of time). What is this magical elixir? A board retreat. I know what you're thinking, "Huh, we have monthly board meetings, why would we take time for yet another "bored" meeting?" Because this meeting is a workshop designed to set the vision, direction and goal of the board for the next 12 months. The board will designate three or four specific objectives to accomplish for the upcoming year, which will result in proactive, focused and results-oriented leadership. A board has numerous ways to set the agenda for the retreat. Here is one suggestion: • Create a vision/mission statement that is relevant to your community. • Use your vision/mission statement to identify and determine the validity of tasks taken on by the board. • Set specific short term and long term goals to be completed in the coming year (be focused—don't overreach). • Develop an annual agenda, parsing out the short term and long term goals to be completed throughout the year. • Determine if committees can be helpful. • Assign a single person to be responsible for each item with agreed upon reporting and communication protocols. Monthly board meetings can then follow the vision and plan established at the retreat, which results in focused and accountable management of the association. Annual retreats/workshops are a proven tool for success in the business and non-profit worlds that can work in community association governance. They are a no-cost, high yield instrument for success. With a season of change and transformation in the air, now is the time for your association to schedule and conduct a board workshop. read more

Typically, in order to trigger a Director and Officer's (D&O) coverage, a claim must be "made" within the policy period. This is commonly referred to as a "claims made" policy. Many D&O policies also require that the claim be reported during the policy period. These are commonly referred to as "claims made and reported" policies. read more