Residents Association Directors & Officers Liability Insurance
Residents of a block of flats or other residential type property may have formed a management committee or perhaps a more formal Residents Association company to oversee the running of their building.
The members of such a committee or association may act in the capacity of a Director, Company Secretary, Trustee, Non Executive Director or other similar “Officer” role. They are often unpaid volunteers.
The residents in their capacity of a Director or Officer face numerous duties and responsibilities, some of which are defined in law (common law as well as the Companies Act, Insolvency Act and many more). These responsibilities include the need to ensure that:
- The property is safe and any lifts are regularly inspected to meet statutory requirements (compliance with Health & Safety legislation)
- Any contractors used to carry out maintenance at the property, do so properly
- The finances are in order as the resident can be held personally liable for the debts of a company if “he knew or ought to have known that there was no reasonable prospect that he company would avoid going into insolvent liquidation”.
Ignorance of the law is no defence, so it is important for any resident wishing to take a position of responsibility, to know the liabilities that they face. Especially as these liabilities may be unlimited.
Directors and Officers Liability insurance (also known as D&O insurance or D and O Liability cover) offers some protection against the costs of defending allegations of a breach of duty, but it won’t cover payments of fines or provide a “Get Out Of Jail Free” card.
The limit of indemnity needs to take into account the cost of defending any allegations and the payment of damages if awarded. A minimum limit of £100,000 should be purchased, but limits of indemnity of £250,000, £500,000, £1M are commonly available. Higher limits can be purchased if required.
Please contact us on 023 9224 8790 for more information or alternatively complete our online enquiry form.