Owners Association

In practice, a director can be held liable for private assets from both inside and outside the Owners' Association. With increased claim awareness and changing laws and regulations, directors are increasingly at risk of being held liable by third parties, the Owners' Association or members of the Owners' Association. The following are a few examples:

Replacing roofing
At the meeting of the Owners' Association it was decided to replace the roofing completely. The Owners' Association commissions the local roofing contractor without investigating the company's financial position. The Owners' Association transfers a large sum of money to the roofing company as a down payment. The roofing company goes bankrupt fairly quickly, causing the Homeowners' Association to lose its down payment. The Association moves to hold the board members liable for the financial loss.

Installation of an electric entrance gate
It was decided to have an electric entrance gate installed so that the grounds of the residential complex would be properly secured. One of the board members of the Owners' Association hired a contractor and commissioned him to install the gate. The contractor is incurring substantial costs and is letting other jobs slide. However, it turns out that there is not enough money in the coffers, which prevents the Homeowners' Association from fulfilling its contract. As a result, the contractor suffers considerable damage and starts making claims on the board members' private assets.

To cover the risks a director faces for mistakes made while performing their duties, you can purchase directors' liability insurance for Homeowners' Associations.