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.
It is important to remember that YOU DON’T NEED TO BE GUILTY TO BE SUED!! The financial resources alone required just to defend an action could be substantial. Do you personally have access to the funds required to provide a legal defence?
– 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!!
Simple Answer: Failure to have Entity Cover included under your Directors & Officers Liability Insurance policy MEANS THAT YOU ARE ESSENTIALLY ONLY 50% COVERED.
Entity Cover provides cover the Management Company / Residents Association as an actual Entity.
In the event of a claim, the claimant will likely name the Management Company / Residents Association along with each individual Director / Officer as Defendants. If the claimant succeeds the court will apportion the settlement amounts against each of the Defendants.
EG: Claimant decides to take a case against ABC Management Company, and Director A and Director B.
The claimant is successful and the total court award including legal fees amounts to €50,000.00. The court advises that 50% (€25,000.00) must be paid by ABC Management Company and the remaining 50% split between Director A and Director B (€12,500.00 each). Director A & B are covered by their Directors & Officers policy and insurers pay the €12,500.00 for which each Director is liable for.
If Entity Cover has not been included under the policy then ABC Management Company and its members are liable for the remaining €25,000.00. ABC Management Company have not got the funds to pay the €25,000.00 for which they are now liable.
ABC Management Company has only 10 members which then means that each member is liable to pay their contribution towards €25,000.00 i.e. €2,500.00 each!!
My name is Cliodhna McCaul. I have been working in the insurance industry since 2002 during which time I completed the ACII examinations and became a Chartered Insurance Broker.
I am a Commercial Account Manager and specialise in Apartment Complex Insurance, Property Owners Insurance and Directors & Officers Liability Insurance.
If you would like a quotation or wish to discuss your insurance requirements please contact me by email or call me on the number below.
My name is Deirdre Wren, I have been in the insurance industry for quite some time and the last 14 years with Dolmen Insurance Brokers.
My position in the Company is a Commercial Account Manager specialising in Apartment Block, Property & Directors & Officers Insurances.
If you would like a quote or wish to discuss your insurance requirements please contact me by email or call me on the number below