DIRECTORS &
OFFICERS INSURANCE
VOLUNTEER DIRECTORS CARRY PERSONAL LIABILITY FOR EVERY DECISION.
Enforcing CC&R rules against one owner while ignoring the same violation by another is the single most common D&O claim against association boards.
Special assessments, assessment increases, and the board's spending decisions are all governance actions that owners can challenge through D&O claims.
Whether to pursue, settle, or abandon defect claims against the developer — every path creates exposure for the board's D&O policy.
General liability covers physical injuries. D&O covers financial and governance claims. They are completely separate coverage lines with no overlap.
Directors and officers insurance is the coverage that protects the people who actually run the association. Every board meeting produces decisions that can generate claims — approving a special assessment, denying an architectural modification, selecting a vendor, enforcing a parking rule, or deciding whether to sue a developer over construction defects. Each of these decisions can be challenged by an owner, a group of owners, or a third party, and the claim lands on the individual directors who voted.
Kelly Insurance Group structures association D&O policies with three-part coverage: individual director protection, entity indemnification, and entity-level claims. We ensure that volunteer directors are personally protected from defense costs and judgments, even when the association's bylaws do not provide full indemnification. For boards navigating developer transitions, construction defect claims, or high-litigation environments, we scale the D&O limits to the actual governance risk.
TAP A BOARD DECISION TO SEE THE D&O EXPOSURE.
Every governance action carries liability. Tap each decision type to understand the D&O implications.
INDIVIDUAL DIRECTORS, ENTITY INDEMNIFICATION, AND ENTITY CLAIMS.
A well-structured association D&O policy provides three distinct layers. Side A covers individual directors when the association cannot or will not indemnify them — the director is protected personally. Side B reimburses the association when it does indemnify its directors, protecting the association's reserves from being drained by defense costs. Side C (entity coverage) covers the association itself when it is named directly in a governance claim. All three layers are necessary because the interaction between the association's bylaws, state law, and the claim circumstances determines which layer responds first.
MORE ASSOCIATION COVERAGE
ASSOCIATION D&O COVERAGE — ANSWERED.
WHAT DOES ASSOCIATION D&O COVER?
Claims against directors and officers for wrongful acts in their governance capacity — assessments, enforcement, vendor contracts, reserve management, and construction defect litigation decisions. Covers defense costs, settlements, and judgments.
DOES D&O COVER INDIVIDUAL DIRECTORS OR ONLY THE ENTITY?
Both. Association D&O typically covers individual directors personally (Side A), reimburses the entity for indemnifying directors (Side B), and covers the entity itself for entity-level claims (Side C).
WHAT IS THE MOST COMMON D&O CLAIM?
Selective or discriminatory enforcement of CC&R rules. A homeowner alleges the board enforced a rule against them while ignoring identical violations by others. Other frequent claims: improper assessments, breach of fiduciary duty, and discrimination in architectural review.
DOES D&O COVER CONSTRUCTION DEFECT DECISIONS?
It covers the board's decisions about whether to pursue defect claims — not the defect itself. If owners sue the board for failing to pursue, settling too low, or spending too much on litigation, D&O responds.
IS D&O THE SAME AS GL?
No. GL covers bodily injury and property damage on premises. D&O covers financial losses from governance decisions. A lobby slip is GL. A special assessment challenge is D&O. Both are essential and do not overlap.
CAN VOLUNTEER DIRECTORS BE PERSONALLY LIABLE WITHOUT D&O?
Yes. Without D&O, volunteers must hire attorneys at personal expense. State volunteer protection statutes provide limited immunity but do not eliminate exposure for gross negligence, fiduciary breach, or discriminatory enforcement.
PROTECT THE PEOPLE WHO RUN YOUR COMMUNITY.
Kelly Insurance Group structures D&O for the decisions your board actually makes — not a minimum-limit afterthought. Since 1881.
The availability of coverage and eligibility for coverage can depend on numerous factors. We cannot guarantee that all customers, individuals, and businesses looking for coverage will be successful in these efforts when contacting our team. All policy coverages and terms need to be fully reviewed by the respective consumer to ensure the coverage asked for is what is specifically being quoted or provided by any insurance policy. Insurance Policies, Coverage Changes, and their terms and conditions are not bound or altered until written confirmation is provided by one of our licensed team members or underwriters. This page does not offer legal advice, legal opinions, or policy interpretations. Rather, this page is meant as a resource to help provide customers and insurance consumers with additional considerations that may help in their insurance buying or pursuit of insurance information. Kelly Insurance Group does not employ or direct attorneys.
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Disclaimer: Coverage availability and eligibility may depend on underwriting review, carrier guidelines, policy terms, state requirements, business operations, risk characteristics, and other information provided during the application or quoting process. Kelly Insurance Group cannot guarantee that every individual, customer, organization, or business seeking coverage will qualify for, receive, or successfully place insurance coverage. All policy coverages, exclusions, conditions, limits, endorsements, and terms should be carefully reviewed by the consumer, insured, or applicant to confirm that the coverage requested is the coverage being quoted, offered, or provided. Insurance coverage, policy changes, endorsements, cancellations, and other policy terms are not bound, changed, confirmed, or altered unless and until written confirmation is provided by a licensed Kelly Insurance Group team member, the applicable insurance carrier, or an authorized underwriter. This page is provided for general informational purposes only and does not provide legal advice, legal opinions, insurance coverage opinions, or policy interpretations.