Directors and Officers Insurance FAQs

• Yes, the law does not distinguish between the Director of a Management Company / Residents Association and that of a major corporation and ignorance of the law is no defence.

• In the event of a legal action from a Third Party, YOU PERSONALLY may be listed as a Defendant you may have unlimited personal liability in law.

Liability from a wrongful act – where there is any actual or alleged wrongful act or omission by a committee member, directors or officers individually or collectively.

• Costs and expenses, with prior agreement of the insurer, that are incurred in investigation, settlement, defence or appeal of a claim
• The policy is on a claims made basis – the policy will only respond to claims discovered and notified to the insurer during the policy period
• The limit of insurance is aggregated, and the policy lasts for 12 months, unless otherwise stated.

Examples of D&O claims as provided by one of our Insurers

• Being held responsible for the engagement of an incompetent contractor
• A prospective employee who may sue an individual trustee of the residents association personally claiming racial discrimination
• A property Owner who may sue the management company for not ensuring that house rules were adhered to, and which could result in the owner having to sell below the market value.
• A resident claiming that the trustees of their residents association failed under Health and Safety regulations
• Residents suing the trustees of their residents association for misusing their funds

– In the event of a legal action from a Third Party, it is likely that they will name all parties involved in the management of your development. Depending on the action this could include:

• The Managing Agent or
• The Management Company / Residents Association or
• YOU PERSONALLY or
• ALL of the above!!

• What is the Limit of Indemnity provided for under the policy?
• What is the policy excess?
• Is Entity Cover included?
• What is the Limit of Indemnity provided for under the Entity section of the policy?
• What is the policy excess applicable under the Entity Section of the policy?
• How much am I currently paying for Directors & Officers Liability at present?

• This cover is NOT automatically included as standard by the majority of insurers – it must be specifically requested.
• Many policies are being sold without this cover
• Most insurers apply a policy excess of €2,500.00 to €10,000.00 in respect of claims made against the Management Company / Residents Association, as an Entity