If you serve on a community association board, you probably have directors and officers insurance, often called D&O insurance. And you probably assume it has your back if an owner ever files a lawsuit.
Most of the time, that’s a fair assumption. But recently, I’ve worked with several board members in South Florida who were surprised to learn their policy covered far less than they expected.
The good news is that this is easy to avoid with a little attention before a problem comes up. Here’s what to know.
What D&O Insurance Is Supposed to Do
Board members are volunteers making decisions on behalf of their neighbors. Occasionally, an owner disagrees with a decision and files a lawsuit, sometimes naming individual board members personally, not just the association.
D&O insurance is meant to protect you in that situation. A traditional D&O liability policy typically pays for your legal defense and may also pay a settlement or judgment if the case goes that way.
Not Every “D&O” Policy Works the Same Way
Here’s where boards can get caught off guard. Some policies sold as D&O coverage are actually legal expense policies, which is a different product.
A legal expense policy may help pay for a lawyer, but only under certain conditions. It may not pay settlements or judgments at all. It’s a little like car insurance that would cover a lawyer after an accident, but not the damage itself.
Both types of policies can look similar at first glance, especially on the declarations page, which is the summary sheet showing your coverage limits and premium. The real differences are in the full policy.
What One Policy Actually Said
As an example, here’s what one recent policy from a well-known legal defense insurer included:
- It did not pay damages, settlements or judgments.
- The insurer, not the board, chose the attorney.
- It covered a maximum of three claims per year.
- It applied only after the association’s other insurance carriers denied the claim, and that denial had to be reported within a set deadline.
- It left many litigation costs to the association, such as expert witness fees, depositions, court reporter fees, travel and appeals.
- If the insurer advanced certain costs, the association could have 30 days to pay them back or risk losing its legal defense.
None of this was hidden. It was all written in the policy. It just hadn’t been read closely until a lawsuit arrived.
Two Things Worth Asking About: Exclusions and Conditions
Exclusions are situations the policy won’t cover. Every policy has them, and that’s normal. A few that tend to surprise boards include appeals, class action lawsuits, most federal court cases, disputes between the association and its own current or former board members, and claims that weren’t reported on time.
Conditions are steps you have to follow for coverage to apply, such as reporting a claim to certain carriers first or meeting specific deadlines. Even if a claim would otherwise be covered, missing one of these steps can lead to a denial.
You don’t need to memorize either list. You just need to know they exist, so you can ask about them.
Three Simple Steps to Make Sure Your Board Is Protected
It’s natural to assume your management company or attorney has already reviewed the association’s insurance. They can certainly help. But understanding the coverage is ultimately the board’s responsibility, and it’s part of the fiduciary duty board members owe to the community.
The good news: it doesn’t take much.
Step 1: Schedule a Yearly Review With Your Insurance Agent
Ask your agent to meet with the board at least once a year, ideally before your policies renew. Review every policy the association carries, not just D&O.
Step 2: Bring a Short List of Questions
- Does our D&O policy pay settlements and judgments, or only defense costs?
- What are the most important exclusions in each policy?
- What steps and deadlines do we need to follow if a claim comes in?
- Has anything changed since last year?
- Are there gaps we should consider filling?
Step 3: Invite Your Association Attorney
Your attorney can help the board think through legal risks and ask follow-up questions, which makes the time with your agent more productive.
Quick Answers
Does D&O insurance protect board members personally?
It’s designed to, but how much it protects you depends on the policy. Some policies cover both your defense and any damages. Others only help with certain legal fees. The full policy is the only way to know.
What’s the difference between D&O insurance and a legal expense policy?
A traditional D&O liability policy generally covers your defense and may pay settlements or judgments. A legal expense policy generally covers only certain attorney fees, often under strict conditions.
The Bottom Line
An insurance policy is a contract, and the protection it provides comes down to the words on the page. A single meeting each year with your agent, and ideally your attorney, can give your board real peace of mind.
Tryson Law works with community association boards and property managers throughout Miami, Coral Gables and South Florida. If your board would like help preparing for its next insurance review, reach out to our Coral Gables office. Let us help you navigate Florida’s community association laws with confidence.
A version of this article by Avi S. Tryson originally appeared in the October 2026 issue of the Florida Community Association Journal and is adapted here with permission.
This article is provided for general informational purposes only and is not legal advice. Reading it does not create an attorney-client relationship. Every policy is different, and boards should consult with qualified counsel about their specific coverage.
