As a director of our freehold company, I thought it would be wise to arrange Directors and Officers liability insurance. Yet when I asked our insurance broker, they said it was an unnecessary expense.
What is your view on the desirability of D&O insurance
The FPRA replies:
It amazes me sometimes at the inept advice given out by some insurance advisors. Of course you must have this insurance.
You as volunteers are putting your whole assets at risk by volunteering to try and run your Association correctly.
The minimum you should have is Directors & Officers liability cover to protect from the costs of any claims against you. Whilst insurance does not cover everything it does protect you for the legal costs of defence etc. The Directors can be liable for breach of numerous legislation (a list of over 50 acts were published last year in our Newsletter), you are liable for compliance with consultation procedures, placing orders, paying bills, including tax liabilities and dealing with the range of complaints that your leaseholders may raise, some of which are not members of your Association.
You own your own Freehold & self manage. This means that you are an easy target for complaints and liability stops with you, unless you have insurance.
My advice is to take cover immediately and no-one should be willing to serve on a committee without such cover.
I have rarely seen a case where D & O cover should be more strongly recommended.
I just wonder if your buildings insurers just do not underwrite this class of business (as many do not) and rather than just say this they said it was not needed?