Under the Davis Stirling Act of 1985 a volunteer Director shall not be held personally responsible in excess of the coverage of insurance if the association held no less than $500,000 in general liability and errors and omissions insurance if the total number of members is 100 or fewer, or $1,000,000 if there are more than 100 members. It goes on to state that members of the association may also not be held personally liable if the association carries 2,000,000 if 100 units or fewer and $3,000,000 if there are over 100 units. This provision protects an individual owner from being sued just because he or she is a member of the association and perhaps the plaintiff feels he or she has the means to satisfy the plaintiff’s claim. An individual owner may personally be liable for a negligent act or omission on their part. Similarly a director may be personally liable as a director if he acted not in good faith, or willfully wantonly or with gross negligence or worse acted outside of his duties as a director. These limits however do not mean that the association may not be liable for in excess of the insurance limits. It simply limits the personal responsibility of both direct ors and its individual members. So an association may quite reasonably decide to purchase in addition to these obviously sensible underlying limits, an umbrella policy for several million more to cover the possibility of an extremely unfortunate accident or occurrence.
The limitations for personal suite have a few rules attached to them such as the director must act in good faith and not in a wanton, willful or grossly negligent manner.
So now we have established minimum limits for both general liability and errors and omissions liability policies the excess amount is up to you?