We've Got You Covered D & O Insurance Now Covers Managers

One of the most important pieces of insurance coverage a co-op or condo building carries is its

directors and officers (D & O) policy. This coverage protects the personal assets of board members from exposure in the event a lawsuit is filed against the board. In many such suits, the building's management firm, its principals and the individual agent responsible for the building are also named.

Until now, in such a situation, the board would activate its D & O coverage and its insurance carrier would provide legal defense for the board members. But the management company would have to engage its own separate defense. Few boards realize, however, that they usually wind up paying for the management company's legal fees because of a boilerplate hold harmless clause in most management contracts.

A Recent Change

Things changed late last year, however, when Chubb Group Insurance introduced a rider now available that will enable a board to add its management company and agent as additional insured on its D & O liability policy. The announcement, made by Kevin Davis, vice president of Ian H. Graham, a California-based broker for Chubb, at a December 1995 seminar sponsored by the recently-established Association of Cooperative and Condominium Managers (ACCM), set a new standard for residential property insurance coverage.


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  • Some managing agents are also board members with good reason. As board members, they could get D&O insurance separate from their E&O insurance policy. This would make up for the lack of coverage when they're not in the board. However, if the D&O policy have a clause that excludes managing agents from coverage even if they're in the board as board members, then those managing agents may not be covered by D&O insurance. Also, a managing agent in the board as a board member may be a conflict of interest and the board should have someone who is a secretary of property or building management working as liaison between the president an managing agent. Coverage depends on what's written in the policy.