Behind every well-run condominium community is a board that does more than manage meetings — it sets the tone for governance, fiscal responsibility, and resident satisfaction. While most directors serve as volunteers, their roles carry legal and fiduciary obligations. Understanding the duties of condominium board of directors is crucial for insurance agents who support HOA clients, especially as governance demands grow more complex.
That’s where directors and officers (D&O) insurance becomes indispensable. This policy helps protect board members from claims tied to governance decisions. Insurance agents play a pivotal role in helping associations assess risks and secure coverage that fits their needs.
Setting Community Expectations
Board members directly shape residents’ day-to-day experiences. From enforcing bylaws to establishing architectural standards, their decisions determine how smoothly the community functions. When rules are applied fairly and communicated clearly, residents are more likely to feel respected and engaged, resulting in fewer disputes and stronger trust.
These responsibilities must align with the association’s governing documents, such as the covenants, conditions, and restrictions (CC&Rs). Transparent, proactive leadership fosters a stronger sense of community and reduces legal exposure.
Research shows that nearly 89% of residents believe their elected board members serve the community’s best interests, highlighting how strong governance affects resident satisfaction. In fact, volunteer board service contributes an estimated $2.9 billion in value each year, underscoring the vital role directors play in operational and financial stewardship.
Making Financially Sound Decisions
Among the most critical duties of a condominium board of directors is financial oversight. Boards approve budgets, manage reserve funds, and hire vendors for essential services. These decisions affect not only day-to-day operations but also long-term property values and resident satisfaction.
Fulfilling fiduciary responsibilities — including the duty of care, loyalty, and obedience — requires board members to act in the community’s best interest. When financial decisions are challenged, a well-structured D&O policy can help cover legal defense costs, settlements, or judgments, subject to policy terms.
Navigating Legal Responsibilities
Board directors face a broad range of legal risks, including allegations of:
- Breach of fiduciary duty
- Failure to enforce bylaws or election procedures
- Discrimination or harassment (non-employment and employment-related)
- Conflicts of interest and procedural missteps
While employment-related claims may require separate employment practices liability insurance (EPLI), many governance-related allegations fall under D&O coverage.
Kevin Davis Insurance Services (KDIS) offers a comprehensive D&O program that includes the components below:
- A broad definition of “insured,” including volunteers and committee members
- “Duty to defend” provisions
- Coverage for both monetary and non-monetary demands
- Legal protection for property managers and developers serving on the board
- Defense for non-employment discrimination and breach of fiduciary duty allegations
These features enable boards to respond confidently to challenges while preserving association resources.
Protecting Communities Through Leadership
Strong leadership protects more than a board’s reputation; it supports the community’s overall stability. In smaller associations, where oversight may be limited, leadership decisions carry even greater weight.
Insurance agents can support their HOA clients in the following key ways.
Recommending Legal Reviews of Governing Documents
Encourage regular reviews of governing documents with legal counsel to ensure compliance with current laws and practices.
Providing Claims Trends and Risk Analysis
Share data on D&O claim trends to help boards understand exposures and adopt preventive strategies.
Educating Board Members on Fiduciary Duties
Clarify fiduciary responsibilities to promote confident, informed governance.
Structuring the Right D&O Coverage
Customize D&O policies based on association size, governance structure, and claims history for more precise protection.
Agents working with a trusted wholesale broker like Kevin Davis Insurance Services, which supports more than 40,000 community associations nationwide, gain access to insurance solutions built for the realities of association leadership.
Final Thoughts
The duties of condominium board of directors reach far beyond administrative functions — they influence financial health, resident trust, and long-term community stability.
When agents align associations with the right D&O coverage and educate boards on governance best practices, they help build stronger communities while minimizing liability exposure.
Call us today to learn how Kevin Davis Insurance Services can help you equip your HOA clients with the leadership protection they need to thrive.
About Kevin Davis Insurance Services
For over 35 years, Kevin Davis Insurance Services has built an impressive reputation as a strong wholesale broker offering insurance products for the community association industry. Our president Kevin Davis and his team take pride in offering committed services to the community association market and providing them with unparalleled access to high-quality coverage, competitive premiums, superior markets, and detailed customer service. To learn more about the coverage we offer, contact us toll-free at (855)-790-7393 to speak with one of our representatives.