The board is personally exposed, and the master policy does not cover them.

Master property policy

The buildings and common elements, at bare walls, single entity or all-in.

Without it — Which one you have decides what every owner must insure themselves.

Directors and officers

Claims against board members over decisions, assessments, elections and enforcement.

Without it — Volunteer board members are exposed personally, and property cover says nothing about it.

General liability

Injury in common areas — pools, gyms, walkways, lots, playgrounds.

Without it — The association owns the places residents are most likely to get hurt.

Fidelity and crime

Theft of association funds, by a manager, a board member or a contractor.

Without it — Frequently required by statute or by Fannie Mae for units to be financeable.

Employment practices

Claims by staff and by residents alleging discrimination or harassment.

Without it — Fair housing complaints against associations are common and are not D&O.

Umbrella

Excess limits over the primary layers.

Without it — A serious pool injury exhausts a primary limit and reaches the members.

What is the difference between bare walls, single entity and all-in?

It is where the master policy stops, and it decides what every unit owner has to buy. Bare walls covers the structure and common elements only — everything inward of the drywall is the owner’s, including fixtures, cabinets and floor coverings. Single entity adds the original fixtures as built but not owner upgrades. All-in covers the units including improvements. The governing documents should say which applies, they often say it ambiguously, and the mismatch between the master policy and the owners’ HO-6 policies is the most common gap in the sector.

What the unit owner needs to carry

Why does a volunteer board need D&O?

Because boards get sued for decisions, and the defendants are people. Disputed assessments and special levies, selective enforcement of rules, election disputes, construction defect and reserve adequacy, rejected architectural applications, and fair housing complaints all produce claims against the board itself — not against the building. The master property policy answers none of it. Check the form covers past and future board members, includes defense, and does not exclude the claims associations actually get, particularly monetary relief and discrimination.

Do lenders require anything specific?

Yes, and it affects whether units in your association can be bought at all. Fannie Mae and FHA set requirements for a project to be warrantable — including fidelity or crime cover at a level tied to the funds the association handles, adequate master property limits, and often liability minimums. An association that lets its fidelity bond lapse can find units failing to close and values affected across the whole project. It is worth checking against the current requirements at each renewal.

How should the deductible be handled?

Deliberately and in writing, because a large master deductible has to land on somebody. A $25,000 or $50,000 deductible on a water loss originating in one unit becomes a dispute about whether the association or that owner pays it — and the answer must be in the governing documents, not decided after the event. Owners can then insure their share via loss assessment cover on their HO-6. Associations that raise the deductible to cut premium without addressing this transfer a problem to their members and to their next board.