Who’s Covered:

The entity or association, as well as coverage for past, present and future directors, officers, employees, managers/management companies, committee members and volunteers.

What’s Covered:

• Discrimination – There should be no exclusions, including race, sex, age, gender and disability.

• Duty to Defend – Defense cost; by far the most prevalent and expensive part of a typical claim creating the greatest exposure for the volunteer board/committee member.

• Failure to Maintain Adequate Insurance –Includes decisions related to association’s insurance policies, coverages and limits.

• Employment Practices Liability (EPL) –Employment related claims such as; wrongful termination, discrimination, sexual harassment, violation of employment laws, wrongful discipline, wage & hour claims, etc.

• Personal Injury –Libel, slander, defamation, wrongful entry.

• Monetary and Non-Monetary Demands.

• Infringement of Copyright or Trademark Laws.

• Actual or alleged error, misstatement, misleading statement, act or omission or neglect or breach of duty.

• Breach of Contract- Provides defense fees and costs but not damages.

It is recommended to review policy exclusions to more easily determine what’s really covered. Especially with D&O policies, if it’s not specifically excluded, it’s covered. The policy form with the fewest exclusions and one that includes the definitions and coverages above, is the best choice for a (Broad Form) Directors & Officers liability policy.

1. The unintended use of uninsured contractors**
2. Contractors who have elected to waive coverage from the workers compensation act (Contractor must provide completed and notarized waiver as officer of a Florida Corp)***
3. Association volunteers (Defined as, voluntary compensation for all board members and committee members working on behalf of the association in their official capacity

** In the event of an injured uninsured contractor OR upon request, the carrier will audit the policy from the original inception date and charge the appropriate classification rate for all 1099’s paid without a certificate of insurance on file.

*** The attached must be completed, signed and notarized. This exemption puts everyone on notice the contractor/individual is making a conscious decision to waive or exempt themselves from workers compensation benefits. Even with this executed form, Florida courts are awarding claims against the association. This workers comp policy will provide coverage/defense for exempt workers/contractors.

In addition to protecting the association, the policy provides full workers compensation benefits to any of the injured per above. The policy is not intended for the weekly/monthly 1099 payment of an uninsured contractor or “resident” that we often see used in community associations. For these type of “employees” it is recommended they be leased. HOWEVER, if this type of claim is made or
W-2/1099 payroll is discovered, the association would no longer be eligible for coverage.

It is highly recommended every association carry this policy.

Attached Form: DWC-250.pdf

Please keep in mind, if you are already receiving mitigation discounts on your policy currently, the discounts are good for five years from the date of inspection, provided no structural or major renovations or improvements have been done.

You can download the latest copy of the form by clicking here.

Update:  This post has been updated!  Please see the updated post here.

Broad Form Directors & Officers liability protection provides the following coverages:

Entity coverage, as well as coverage for past, present and future Directors, Officers, Trustees, Employees, Committee Members and Volunteers.

What’s covered:

• Discrimination – No exclusions
• Duty to defend- Defense cost
• Failure to maintain adequate insurance
• Wrongful Termination
• Employment Practices Liability-EPL
• Personal Injury-Libel, slander, wrongful entry, etc.
• Monetary and Non-monetary demands
• Sexual Harassment in work place
• Infringement of copyright or trademark laws
• Actual or alleged error, misstatement, misleading statement, act or omission or neglect or breach of duty
• Contract manager/Management company included
• Breach of Contract

-Mandatory policyholder notices regarding the potential surcharges and assessments to Citizens policyholders. This form will be effective January 1, 2012 for all new business applications as well as renewals.

-Effective January 1, 2012 for multi-peril policies and effective February 1, 2012 for Wind Only policies, Citizens will no longer provide coverage under Coverage A (dwelling) or Coverage B (Other Structures) for the following items, nor will there be a “buy back” option to add the coverage back on:

• Screened enclosures that are aluminum framed or not covered by the same or substantially the same materials as that of the primary dwelling.
• Carports that are aluminum or not covered by the same or substantially the same materials as that of the primary dwelling.
• Patios that have a roof covering not constructed of the same or substantially the same materials as that of the primary dwelling.
• Awnings.
• Structures with a roof or wall covering that are thatch, lattice, slats or a similar material.
• Slat houses, chickees, tiki huts, gazebos, cabanas, canopies, pergolas or similar structures constructed to be open to the weather.
• Any of the above structures that currently are scheduled under Coverage B – Other Structures will have their increased limits and coverage amounts removed at renewal. 

And in closing, just some facts and figures that may be surprising to all Floridians:

Florida has approximately 6 million policies in force at this time, of that figure, Citizens has over 1.4 million policies, or almost 25%  of the total market! Of those policies, almost 1 million of them are Personal Lines and it is growing at the rate of 1000 policies a day.

Overall, Citizens has over $508 billion in exposure, yet only collects $3 billion in premium and has almost $12 billion in cash and assets as well as only $575 million in private reinsurance. So while that quote with Citizens may be less expensive to others offered to you, it may not provide the coverage you need, and you most likely will pay even more in the future with assessments and surcharges.

1. Statutory workers comp benefits for all association volunteers.
2.  Protection from uninsured contractors.
3. Protection from contractors who have elected to waive coverage from the workers compensation act. (Florida courts have already set a precedence penetrating this waiver).

Without this policy, the association could be held holding the bag on a work related injury. The association’s general liability policy specifically excludes work related injuries. This policy is a must for every community association and is recommended by Florida Workers Comp Bureau of Compliance.  Absolutely provides a huge bang for the $$.

As one can see, the statute is clear as to who is to be covered. What is not as clear is the amount. Good rule of thumb is three months operating income, plus reserves and round up. To be sure, bonds are important/required coverage, but NOT expensive.

The association’s “Liquid Assets” represent the single greatest risk of loss at any given time to the association. In addition to the board, management agents and employees often have daily access to these funds. In order to protect those funds in the care, custody and control of the management agent ( management company or independent contractor) the bond or crime policy MUST include a designated agent endorsement naming the management agent/company. A salaried manager, directly employed by the association ( typically on site), is covered as a defined employee under the association’s bond.

In addition to the fidelity bond, it is important the crime policy include electronic transfer fraud, forgery or alteration, computer fraud and money orders and counterfeit money.

It would be a crime not to properly protect the “Liquid Assets” of the association.

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