Cohousing-L Mailing List: RE: Board Liability Insurance

[Rob Sandelin (floriferous]

Our condominium documents provide for legal liability escape for board
members. I do not have that document in front of me, but there is a legal
terminology which I think is called good faith indemnity which provides
legal blanket coverage for board members. Our lawyer specifically added this
for our benefit. We were told by an insurance adjuster who was a member of
the community for a few years that board insurance is often just a racket,
and that such policies provide little if any real coverage and in our case,
was not needed nor advisable since our legal documents clearly protect the
board.  Since insurance agents make their money selling you insurance, you
might want to find a friendly lawyer and ask their advice about whether your
condominium documents already protect the board. 

Just to put this in perspective, I was just on the phone with my nephew in
Law school who has access to legal research databases. According to his
quick look, in Washington State, there have 12 cases brought against
non-profit boards since 1980, of which 2 were against housing boards. That?s
2 suits in  25 years against a housing board. So how many legal lawsuits
have been filed against cohousing boards?  If you live in a place with lots
of suits against housing boards then your risk asessement might be
different. 

You can spend a huge amount of energy being afraid of stuff that is unlikely
to ever occur. Earthquakes could destroy our commonhouse, yet we do not
choose to carry expensive insurance riders for that. In my opinion, it is
always good to evaluate risks, but to do so against real probabilities as
opposed to being manipulated by fears. I had a friend who was in a car
accident and was trapped in the car for some time until she could be cut
out. After her recovery she bought a $4,000 jaws for life cutter tool and
insisted to everyone she knew that we were all fools not to have this tool
in our car. She was obviously over projecting her experience. The odds of
such a tool being useful are weighed against its cost. Thus I do not have
one for obvious reasons.  

The probability of a suit for which we are not protected are weighed against
the cost of insurance. Thus we do not have it for obvious reasons.


Rob Sandelin
Sharingwood Cohousing, Snohomish, WA  
Sharingwood.org
Naturalist, Writer
The Environmental Science School
http://www.nonprofitpages.com/nica/SVE.htm
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