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Director Liability
When reading the CPLEA publication for Condo Board Conduct publication, I had understood that board directors could individually be held legally liable if actions were not deemed reasonable. My interpretation was that DO&O insurer would deny insurance liability if a board director acted outside of what would be deemed reasonable. If a director suggests actions which could be deemed unethical, illegal or inappropriate, could they be personally liable for their actions if a lawsuit was commenced by a condo owners?
I assume DO&O insurance would cover damages to a condo owner if the director(s) acted in good faith, to the best of their abilities but not if director(s) did not act in good faith or manner that would be deemed reasonable (or actions that would not be taken by MOST reasonable persons…)
Or does DO&O liability insurance cover any actions taken by director(s) if a legal challenge for damages was made?
Thanks!
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1 Reply
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I believe every case would have to be looked at from the situation’s specifics, and it would not surprise me if the decision could be in a grey area – e.g. one lawyer could disagree with another. In my experience, the D&O insurance may not cover some cases, even where an officer of the board based their behaviour on the advice of a professional.
