Residents of a block of flats or residential property may have established a formal Residents’ Association or Residents’ Management Company. This may be to oversee the upkeep and maintenance of their property, but in certain circumstances may also involve financial and legal matters concerning the property. In doing so, the members of such an association or company may act in the capacity of a director, company secretary, trustee, non-executive director or other similar “officer” role.
These are positions of trust and individuals must act accordingly. They will be liable for any act which is negligent, outside their authority, or in breach of duty or trust. Individuals in these roles accept responsibility for directing its affairs, ensuring that it remains solvent, well run and meets the aims for which it has been established.
In undertaking such activities individuals face numerous duties, rules, regulations and responsibilities. These include the need to ensure:
In addition the association or company may find themselves involved in legal proceedings as a result of public statements made or even disputes over the use of the association’s or company’s funds. Individuals acting in such a role are potentially placing their personal assets at risk if an allegation is made where they have failed to use reasonable care and skill in executing their duties. Even if a legal action is successfully defended it may still involve incurring significant legal fees.
Anyone who takes on a management or administration position in a Residents’ Association or Residents’ Management Company should carefully consider the need for Directors & Officers insurance.
Our Directors and Officers Liability Insurance protects you against a wide range of legal actions. It includes cover for legal defence costs and awards and settlements if you’re found to be in breach of your duties. So it saves you, or your spouse or heirs who can also find themselves liable, from having to pay out of your own pockets. Plus, with our cover you can also choose to add entity cover on to your policy. This provides protection on certain occasions when an action is brought against your residents’ association itself rather than you as an individual.
Therefore you indemnify your personal wealth by choosing to take out our Directors and Officers Insurance cover.
For more information about Directors & Officers Liability Insurance cover please call our team today on 0333 222 1030.