Protecting the Board Inside D&O Insurance

Say you’re a new association trustee in your condo. It’s a great honor—you’ve been recognized as a leader, and now you can try to put some of your ideas into effect. However, in your new position, you could now be sued because of your fiduciary responsibility.

Rookie trustees—because so many are neither legal, real estate or insurance professionals—can easily make costly, although well-intentioned, mistakes leading to unanticipated problems. And since trustees are volunteers who usually have other jobs and other responsibilities, having to take a lot of time out of their busy schedules to appear in court is the last thing they need.

Taking care of board business takes up enough time, and trustees need to be able to concentrate on their duties without having to worry about threats hanging over their heads—or having to pay for their mistakes out of their own pockets.

Fortunately, there’s a remedy to help association trustees, and that’s directors’ and officers’ insurance. D&O insurance, as it’s commonly known, isn’t unique to condos and co-ops: almost every large corporation has it. In general, it is a form of insurance that protects corporate directors and officers against financial damage resulting from lawsuits related to their conduct as board members.

What’s Covered


Related Articles

Insurance Basics

Is Your Association Adequately Covered?

Directors and Officers Insurance

Must-Have, Or Luxury?

Indemnity Clauses and Liability

Protection Runs in More Than One Direction



  • This is a scary article for a trustee to read. I had always thought a trustee could not be sued, that you were trusted to make desisions. condo documents are difficult to read what exactly should I look for. Is this something I can ask the building insurance if i am covered for.. I recently provided all the owners with a lng list of repairs needed but as a single trustee have no power to see that they are done, does this provide me with any protection if in the future one of these undone repairs comes under legal action? do the number of units or self managment become a factor? Do the trustees have to have the owners vote to provide this insurance. In hard times are trustees sitting ducks for owners with financial troubles?