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a single lawsuit from a slip-and-fall from property ownership and daily stand what your coverage entails.
accident, property damage, or defa- operations. This mandate includes
mation could lead to an overwhelming coverage for liabilities related to the Directors and Officers Insurance
legal and financial burden. This policy use of common areas, machinery, and While CGL insurance primarily safe-
helps ensure that legal defence and other operational assets. By ensuring guards the condo corporation, Directors
settlements are managed, allowing the they meet these requirements, corpo- and Officers (D&O) Insurance plays a
corporation to continue operations rations can protect against financial vital role in protecting property manag-
without facing potentially devastat- and legal risks that may arise from ers, management firms, employees,
ing costs. accidents or damage on the premises, volunteers, and current and former
Under Ontario’s Condominium Act which are often unpredictable and board members. This insurance shields
(Section 102), condo corporations are potentially costly. However, the specific these individuals from lawsuits from
legally required to maintain liabil- protections offered by each CGL policy decisions or actions taken in their offi-
ity insurance to cover risks arising may differ, so it’s important to under- cial capacities.
Notably, Section 37 of the
Condominium Act establishes that
directors must act in good faith, exer-
cise honesty, and demonstrate the
care, diligence, and skill that a reason-
ably prudent person would exhibit in
similar circumstances. D&O insur-
ance should indemnify directors,
provided they have acted within the
bounds of their responsibilities.
Additionally, a well-rounded D&O
policy should include coverage for
human rights complaints and defence
costs. With a growing number of
human rights complaints in condo-
minium management, including
discrimination and harassment claims,
directors and officers face significant
potential liability. D&O insurance
can assist in alleviating the financial
and emotional burdens of defending
against these claims, allowing lead-
ers to focus on the well-being of the
condominium community. Again, all
insurance policies can differ, making
it essential to consult with your insur-
ance broker to ensure all points are
covered in your policy.

Legal Expense Insurance
CGL and D&O Insurance are
commonly recognized pillars of
Condominium Corporation Insur-
ance. Legal Expense Insurance (LEI),
while less frequently discussed, is
equally important as it can address
some coverage gaps between CGL
and D&O policies. LEI typically
provides condo corporations with
resources to manage various legal
challenges, including access to legal
advice, contract disputes, and prop-
erty protection.
An LEI policy may include access
to a 24/7 legal helpline, allowing condo
corporations to receive general legal
assistance and guidance on various
30 I CM Magazine WINTER 2024