The Top 10 Association Insurance Questions - Part 7

Today we discuss the seventh installment of "The Top 10 Questions asked by Board Members and Community Managers Regarding HOA and Condo Association Insurance." 

By: Brian J. Finnerty (CIC), Area Sr. Vice President, Arthur J. Gallagher Risk Management Services

Question 7:
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!