As a board member you obviously care about your community and its well-being – good for you! Your community will benefit from your dedication and personal investment. But something you and your fellow board members should consider is personal liability for accidents that happen on association property.  Generally, individual board members aren’t found liable. However, lawyers like to cover all their bases, so there is a possibility that a board member, or members, may be named in a lawsuit against an HOA.

Here are five things all board members should consider regarding personal liability:

  1. Always act in the best interests of your community and within the parameters of your governing documents. And make sure you document the logic and reasons behind the decision making.
  2. Act as a board, not individuals. Avoid letting individuals make unilateral decisions; it opens them up to unnecessary liability. This also prevents disgruntled board members from making intentional decisions aimed at hurting someone or causing damage/trouble.
  3. Work with a qualified, experienced property management company and involve them in the decision-making process and documentation. A property management company can add another valuable layer of checks and balances.
  4. Carry Directors and Officers (“D&O”) insurance. A good D&O policy protect board members and reimburses them for any litigation costs or other expenses resulting from their action.
  5. If you’re named in a lawsuit in connection with board duties, don’t panic. Instead call your HOA’s insurance agent, send them copies of the lawsuit via certified mail, and contact your HOA’s attorney for advice and assistance. Make sure to stay proactive – follow up with the insurance company and secure legal counsel as soon as possible to make sure it is dealt with correctly and promptly.

The chances of an individual board member being held personally liable in connection to board member duties is unlikely. The best thing you can do is make sure your board is properly insured, and that all decisions are made with the proper checks and balances in place. By keeping these steps in mind, you’ll be doing the most important things you can to protect yourself from personal liability for board decisions or actions.

If you feel like your board is vulnerable, or if you’re having trouble finding board volunteers because of the risk of personal liability, give Spectrum a call. We’re happy to help however we can!