Published on: June 28, 2019




  1. Some policies consider a claim a letter stating wrongdoing e.g. breach of fiduciary duty, failure to repair a leaking roof.
  1. Some policies do not consider a claim having occurred until a suit is filed or a claim filed with a regulatory body.
  1. When a manager receives a letter threatening suit or stating board or manager did something wrong, you should send letter and insurance policies to your attorney.
  1. The attorney will review the policies to determine if the letter is a claim.
  1. If it is a claim, the Attorney will review where claims must be sent. Notification to the agent is not enough although the agent should be notified.
  1. If you want your attorney to defend the claim, your attorney could submit the claim requesting that he or she be appointed panel counsel by the carrier.
  1. At some point, you will receive a coverage letter stating that the claim is allowed with full defense and indemnification or that the claim is denied or that the claim is covered under a reservation of rights.
  1. If the claim is allowed, you and your attorney should review the potential recovery. If the claim is for $5 Million and you only have $1 Million of coverage, you want your attorney monitoring the claim and perhaps making demand on the carrier to settle the claim for the full limits of the policy.
  1. If the claim is denied, the attorney should review the denial and decide whether to fight with the insurer over the denial. Sometimes the denial is wrong and the carrier could be responsible for legal fees and treble damages.
  1. If the claim is allowed under a reservation of rights, in Massachusetts, the association has the right to appoint its own counsel.
  1. Consider an umbrella policy for $5 Million, $10 Million, $25 Million or more. The extra coverage is inexpensive.  Consult with your insurance agent and attorney as to the limits.

If you have any questions, contact founding Partner, Stephen M. Marcus at