By: Brian J. Finnerty (CIC), Area Sr. Vice President, Arthur J. Gallagher Risk Management Services
What are non-monetary claims?
In the context of an association’s insurance policy these are claims that are typically made under a Directors and Officers Liability Policy (D&O). These are the claims that make up a majority of the claims filed against homeowner association D&O policies. They are not demanding monetary compensation but rather are looking for a change in a decision that the board has made.
For, example a lot owner is upset at a recent architectural review committee decision to not allow certain types of fencing and the lot owner sues the board. If your D&O policy does not have coverage for non-monetary claims the association is left footing the bill for the defense.
Not all D&O policies are the same. Some limit coverage for non-monetary claims or don’t cover them at all. Make sure your policy has this coverage.
Stay tuned for next week for Question 8!