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.