Skye Bridge

The short answer is: yes and no.

D & O Insurance (Directors and Officers Liability Insurance) should protect Committee Members and Committee Chairs in their actions as a Committee Member, as long as the Committee Member is acting in accordance with the scope of the Committee Charter. 

By “protection”, this means, that the Association’s insurance will assign legal counsel to defend Committee members, in the case of a lawsuit against the Committee Member or Committee.

Committee Charters should specify the purpose and authority of the Committee. Insurance companies and legal teams will utilize the Charter to explain why a Committee member acted in the fashion that they did. A Committee Charter will help prove that the Committee member was acting in the best interest of the Association as a whole, by following the terms as outlined in the committee Charter.

In order to be considered for D&O protection, names of Committee Members and Committee Chairs should be recorded in the Minutes of the Association (Board Meeting Minutes), and then reported to the Insurance Carrier of the Association.

Please contact your Association’s Insurance agent today to ensure that your Committee members have D&O coverage.

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Summary: Committees and volunteers of the Association should have protection (legal defense assigned) against wrongful claims and lawsuits that arise in relation to their role as a Committee member, AS LONG AS, they are acting in accordance with the scope of the Committee Charter. Committee member names should be recorded in the minutes and submitted to the insurance carrier to ensure coverage is provided. Please check with your insurance agent to ensure your Association has proper coverage for the lawsuits that can arise in the day-to-day business of your Community’s management.