Homeowners association (HOA) board service can feel like a volunteer gig — until a homeowner alleges the board mishandled an election, enforced rules inconsistently, or failed to follow governing documents.
That’s where many boards get surprised: Good intentions do not stop lawsuits. For insurance agents, this is an ideal opportunity to lead with education, not fear, and position HOA directors and officers insurance as a practical governance safeguard.
What Is Directors & Officers Insurance for Community Associations?
Directors and officers (D&O) insurance helps protect community association leaders against claims alleging wrongful acts tied to board decisions and governance. Coverage commonly applies to board members, committee members, and, in some cases, the association itself.
A critical point for agents to reinforce is that volunteer status does not reduce liability exposure. Community association boards still owe fiduciary duties to homeowners. According to guidance from the Executive Council of Homeowners (ECHO), those duties generally include:
- Duty of care: Board members must make informed, reasonable decisions, relying on appropriate experts when necessary.
- Duty of loyalty: Board members must act in the association’s best interest and avoid conflicts of interest or self-dealing.
- Duty of obedience: Boards must follow governing documents, established procedures, and applicable laws.
When homeowners believe a board failed in any of these areas, disputes can escalate into lawsuits — even when board members acted in good faith. ECHO stresses that these obligations apply to everyday governance decisions, not just major financial actions. From an advisory standpoint, that’s where HOA directors and officers insurance plays a critical role.
Why Governance Decisions Create D&O Exposure For Boards
When you talk with association clients, connect D&O risk to everyday moments — not worst-case hypotheticals. Claims can arise from:
- Disputes over elections, meeting notices, or record access
- Selective enforcement allegations (or the appearance of it)
- Architectural approvals and denials that upset owners
- Vendor and contract decisions challenged by members
- Budget choices, special assessments, or reserve handling questioned after the fact
These are governance issues. They often involve allegations about process, fairness, and authority — exactly where HOA directors and officers insurance becomes a core advisory topic. Helping clients understand these triggers enables agents to position HOA directors and officers insurance as a governance safeguard, rather than just another line item on the policy schedule.
What D&O Insurance Covers — And Where Agents Need To Set Expectations
D&O insurance commonly responds to defense costs and covered damages arising from allegations tied to board governance. That said, agents should set expectations early:
- Policy wording, definitions, and endorsements drive what “wrongful act” means.
- Exclusions and carve-backs vary widely by market.
- Certain disputes may overlap with other lines, such as crime insurance, or fall outside D&O entirely.
This is also a good time to clarify how D&O differs from general liability, which typically addresses bodily injury and property damage — not governance decisions.
How Agents Can Use D&O Insurance To Strengthen Client Relationships
Boards do not want a “policy lecture.” They want confidence that they are doing things correctly. Agents who educate boards on how HOA directors and officers insurance works can:
- Reduce friction when a dispute becomes a claim
- Support volunteer recruitment by addressing personal liability fears
- Keep renewals steadier by preventing surprise coverage gaps
Treat HOA directors and officers insurance as an annual governance check-in. Each year, ask what changed: board composition, enforcement approach, vendor relationships, or election procedures. Then review limits, exclusions, and endorsements accordingly.
Reach out to Kevin Davis Insurance Services to strengthen client conversations around HOA directors and officers insurance, access specialized markets for community associations, and support board education before disputes turn into claims.
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.