Page 9 - The NY Cooperator August 2019

COOPERATOR.COM THE COOPERATOR —AUGUST 2019 9 ships and communications that charac- terize a small association with just a few and had outdoor space in the form of a who brought the suit to begin with! units don’t exist. The intimacy of a small backyard. He wanted to install a Jacuzzi association might go a long way toward in his garden, and the board vetoed it. He cers insurance may seem excessive and/ avoiding the kind of angry or litigious took them to court and won. The costs of or frivolous to board members when ana- situation that might result in a lawsuit defending the suit were substantial, espe- between the board and one of the own- ers, particularly as the owner might be policy paid the legal costs in the end, left in the closet just because the threat of a board member. Good intentions may which could have had severe repercus- count for more in that kind of situation... or not. Boonshoft recommends that small associations carry D&O insurance in any case. “They still need it, as much as they need all types of liability and casualty in- surance. I always counsel in favor of it, but a board can make their own decision.” Real-Life Risks One attorney describes two instances where the lack of D&O insurance might have resulted in a financial disaster for the corporation or association. One involved a large co-op in New York City with a no- pet policy that was sued over a resident’s right to keep a pet for emotional comfort and support. New York City’s anti-dis- crimination law provides protection for residents in no-pet buildings who have medical proof that they require a comfort animal to alleviate emotional distress. In this case, a complaint was filed in federal court against both the corporation and the individual board members. Eventu- ally the case settled, with the resident able to keep their pet. The insurer paid the legal fees, which were formidable – but since the insurer was not required to pay for any fines under the policy, the dam- ages awarded by the court were paid by the corporation. Another example offered by the same attorney was triggered by an owner in a small co-op who lived on the ground floor community—including the shareholder tion,” says Schneider. “When I explained cially for a small corporation. The D&O on expenses, it is an ‘umbrella’ better not sions for the financial health of the small tion where they didn’t carry the protec- While the cost of directors and offi- lyzing budgets and trying to hold the line Keep your umbrella handy. rain is low. “I came across one corpora- to them why they needed it, they bought it immediately.” It may look like a beauti- ful, sunny day, but one never knows when the storm clouds may suddenly appear. n A J Sidransky is a writer/reporter with Th e Cooperator, and a published novelist. “Every board should have \[D&O insurance\]. It is incumbent upon the board to have it. If I represent someone who is contemplating becoming a board member and their board doesn’t have it, I tell him or her not to run.” —Stephen Boonshoft We will turn your unused building space into a secure, state-of-the-art storage facility FOR FREE . We will handle everything from start to finish, and we’ll PAY YOU monthly. What do these board members and owners know that you don’t? Offer residents an exceptional onsite storage amenity! Our Investment. Your return. Map data ©2019 Google 1 mi Set a home address Set a work address f www.bargold.com CALL BARGOLD! Storage4U bargold.com @ 41-41 38th Street Long Island City, NY 11101 (718) 247-7000