👮♂️ No Good Deed Goes Unpunished
You joined your Condo Association (HOA) board to help improve the neighborhood. You are a volunteer. You don't get paid a dime.
The board votes to ban short-term rentals (like Airbnb) or selects a new roofing contractor. A homeowner gets angry. They don't just sue the HOA entity; they sue you personally for "Breach of Fiduciary Duty" or "Discrimination."
You call your Homeowners Insurance agent. He says, "Sorry, your personal policy covers bodily injury (slips and falls), not bad business decisions." Suddenly, your house, your car, and your retirement savings are on the line for a volunteer job. This is why you need Directors & Officers (D&O) Insurance.
Many volunteers believe the federal "Volunteer Protection Act" makes them immune to lawsuits. It does not. It has huge loopholes, especially if "gross negligence" is alleged.
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| Volunteer on Your HOA Board? |
What Does D&O Insurance Actually Cover?
D&O is "Malpractice Insurance" for decision-makers. It pays for your legal defense costs (which can easily hit $50,000 even if you win) and any settlements.
Common Lawsuit Triggers in 2026
- 1. Mismanagement of Funds: "The board wasted our dues on an expensive landscape project instead of fixing the pipes!"
- 2. Failure to Maintain (Structural Integrity): "The roof leaked and ruined my condo because the board delayed repairs to keep dues low." (A major issue in Florida and coastal states).
- 3. Discrimination (Fair Housing Act): "The board denied my tenant application because of my race, age, or disability."
- 4. Libel/Slander: "The board president spoke badly about me in the meeting minutes or newsletter."
The 'General Liability' Confusion
Every HOA has General Liability (GL) insurance. But it is useless for these lawsuits.
How to Protect Yourself Before Joining
Before you say "Yes" to joining a board, you must ask two questions.
Question 1: "Does the HOA have D&O Insurance with adequate limits?"
If the answer is No, refuse to join.
*California Alert: Under the Davis-Stirling Act, volunteer protections often disappear if the HOA fails to maintain minimum insurance levels (e.g., $2M - $3M depending on size).
Question 2: "Does the policy include Non-Monetary Claims?"
Some cheap policies only cover lawsuits asking for money. But many HOA fights are about "Injunctions" (e.g., forcing you to take down a sign). Defending these non-monetary lawsuits costs legal fees. Make sure the policy covers "Defense Costs for Non-Monetary Claims."
💡 Pro Tip: Property Manager Protection
Good D&O policies also extend coverage to your Property Management Company. Why does this matter?
If the manager gets sued for carrying out your orders, they will turn around and sue the HOA for indemnification (reimbursement). Covering them in the primary policy prevents this expensive infighting.
🛡️ Chief Editor's Verdict
Your time is free. Your liability is not.
- Check the Limit: A $1 Million D&O policy is the bare minimum. In litigious states like California or New York, $2-5 Million is recommended.
- Retroactive Date: Ensure the policy has "Full Prior Acts" coverage. This protects you from lawsuits filed today about decisions made before you bought the policy.
- Verify "Insured vs. Insured": Ensure the policy covers lawsuits between board members or from the HOA against a board member, as these are common.
Serve your community, but shield your assets first.
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