Question 1

Liability

Accepted Answer

Q: We are a limited company managing our own block. We are looking to renew our director's liability insurance and have a few queries regarding the quotes we have received: Firstly, is management liability the same as director's liability? Secondly, is it better to have a specific policy for residents' associations, or would a commercial policy offer an appropriate level of cover? Finally, we don't directly employ anyone - our cleaner, gardener and other contractors are on contracts and self-employed - so do we need any cover related to employment? FPRA Hon Consultant Belinda Thorpe replies: The purpose of a Directors & Officers policy is to provide defence costs and/or compensations for civil liability arising from the wrongful act of a director or officer in the running of the company. It is an all too commonly held misconception that your role within a company or sitting on a committee as a volunteer is protected. Unfortunately, this is simply not the case. Your decisions and those of your fellow board or committee members could end up costing you personally. A wrongful act is defined in the policy as:- Any actual or alleged

Breach of trust
Breach of warranty
Neglect
Error
Omission
Misstatement
Misleading statement

committed by persons insured Persons insured can be present directors and officers, former directors and officers, future directors and officers, spouses, heirs or legal representatives in the event of death, bankruptcy or insolvency of a director or officer. I would recommend a directors and officers’ liability insurance policy which is designed specifically for residents’ associations or residents' management companies, particularly as the risks associated with being a director of a residents management company aren't huge, therefore the premium for this type of cover would be cheaper than a "non-specialist" policy. You will find that the premiums quoted are for a standard policy wording, and if you request the employment cover be removed, it will make little difference to the cost. [submitted March 2016]

Question 2

Liability

Accepted Answer

Q: We are a limited company managing our own block. We are looking to renew our director's liability insurance and have a few queries regarding the quotes we have received: Firstly, is management liability the same as director's liability? Secondly, is it better to have a specific policy for residents' associations, or would a commercial policy offer an appropriate level of cover? Finally, we don't directly employ anyone - our cleaner, gardener and other contractors are on contracts and self-employed - so do we need any cover related to employment? FPRA Hon Consultant Belinda Thorpe replies: The purpose of a Directors & Officers policy is to provide defence costs and/or compensations for civil liability arising from the wrongful act of a director or officer in the running of the company. It is an all too commonly held misconception that your role within a company or sitting on a committee as a volunteer is protected. Unfortunately, this is simply not the case. Your decisions and those of your fellow board or committee members could end up costing you personally. A wrongful act is defined in the policy as:- Any actual or alleged

Breach of trust
Breach of warranty
Neglect
Error
Omission
Misstatement
Misleading statement

committed by persons insured Persons insured can be present directors and officers, former directors and officers, future directors and officers, spouses, heirs or legal representatives in the event of death, bankruptcy or insolvency of a director or officer. I would recommend a directors and officers’ liability insurance policy which is designed specifically for residents’ associations or residents' management companies, particularly as the risks associated with being a director of a residents management company aren't huge, therefore the premium for this type of cover would be cheaper than a "non-specialist" policy. You will find that the premiums quoted are for a standard policy wording, and if you request the employment cover be removed, it will make little difference to the cost. [submitted March 2016]

Liability

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