Insurance policy likely would protect former board member

Q: I served on the board of directors for my homeowners association from 2012-2016. This year two new directors were seated and they have been conducting lengthy and laborious research on all of the financial decisions that were made before they took over the board. Shortly after they took over our board, the treasurer resigned so there are in complete control of the board.

They have been recently making serious accusations against former board members, including myself, and I feel that it would be in my best interest to contact the insurance company that we had our directors and officers liability and errors and omissions insurance policy with.

How would I obtain the DO/ EO insurance policy that carriers name and contact information? I’m not sure that I’m going to get cooperation from the new HOA board members or our community management company in light of the fact that they are driving these allegations of misconduct.

I appreciate any advice that you could offer me with this matter as it has been very upsetting, given the fact that I volunteered my time freely for four years serving our community, and I’m now being unfairly targeted by the new HOA board of directors.

A: First, you have the right to obtain the contact information pertaining to the agent and carrier that provides the directors and officers liability insurance) coverage. You will need to contact the management company for that information. You could also contact the insurance agent to help review the policy coverage with you.

Depending upon your policy coverage, and if your association has not changed carriers, if you were to be sued by your current directors, the policy would most likely cover you. This coverage would be based upon the fact that you and the other board member carried out your fiduciary responsibilities. The current board members would have to provide evidence to the contrary. Just because they may not like what funds were spent for specific items does not mean that you and the previous board member would be in violation of any law if the expenses were approved according to your governing documents and Nevada Revised Statutes 116 laws.

The coverage would not kick in until a formal lawsuit was initiated. Generally speaking, the association board would be required to bring a formal complaint against you with the division before a lawsuit was filed.