Directors’ & Officers’ Liability Insurance

Even the most prudent director can make decisions in good faith which prove later to be ill judged but ignorance is no defense in the eyes of the law.

Directors’ and officers’ of residential management companies should be aware that they could potentially face unlimited personal liability without the protection of this affordable insurance.

Although directors’ and officers’ typically hold their positions as volunteers, and out of
goodwill, the law recognises no fundamental difference between people running a residential
management company and those running a large commercial enterprise.

Directors can beheld personally liable for the financial consequences of their actions and errors. Managing a building is a time consuming task, even with the assistance of property
managers. Any director willing to put in the time and effort deserves the protection that this
affordable ‘peace of mind’ liability insurance can provide.

Who is covered?
Any person presently or previously appointed
as a director or officer, their legal heirs or
representatives and any employee of the
residential management company, named asa co-defendant.

What is NOT covered?
As you would expect, the policy does not
cover intentional dishonesty or fraud, nor
does it cover taxes, fines, penalties or
punitive or exemplary damages.
This policy does not cover loss or damage to
property or personal injury which would
typically be covered by other insurances.

Is this cover needed when managing
agents, with their own professional
indemnity insurance, are engaged?

Yes, the two really are complementary. This
insurance relates specifically to breaches of
duty by directors and officers in managing the
company’s affairs. A managing agent’s
professional indemnity relates only to claims
arising from his own professional duties.