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A premium indication, not personal advice. Prefer to talk it through? Call 072 - 509 24 56.
In brief
An owners' association is a legal entity and its directors therefore fall under Article 2:9 of the Dutch Civil Code: they are bound towards the association to perform their duties properly. That provision makes no distinction between a paid managing agent and a resident who takes on the board role in the evenings. Where a director is seriously at fault he can be held personally liable.
If there are several directors, joint and several liabilityin principle applies: each can be held liable for the whole and must then seek recovery from the others. Anyone wishing to exonerate himself must show that the subject did not fall within his duties and that he was not negligent in taking measures. That only works with minutes in which your position can be found.
Note what this cover is not. Damage to the building itself belongs with the VvE's buildings insurance (opstalverzekering), and the association's liability for a defect in the structure runs through the liability insurance for real estate. The directors' cover relates solely to your personal liability as a director.
What does directors' and officers' liability cover for a VvE?
The structure of the cover in three parts, with an overview per situation below.
The basics
Liability
AVB for property damage and injury, BAV for professional errors.
Damage to third parties
Employers' liability
Care, custody and control as an extension
Your business
Assets and continuity
Business contents, goods and lost turnover during downtime.
Business contents at replacement value as new
Goods at cost price
Business interruption or additional costs
If you employ people
Staff
Sickness absence, accidents and the traffic risk.
Continued pay for 104 weeks
Group personal accident
WEGAS for traffic risks
What is covered
Situation
AVB
BAV
Cyber
Injury to a visitor or customer
Yes
No
No
Damage to a client's property
Sometimes
No
No
Financial loss caused by an advisory or calculation error
No
Yes
No
Downtime after a ransomware attack
No
No
Yes
Data breach involving personal data
No
Sometimes
Yes
Damage to property in your care
No
No
No
This overview is general in nature and is not personal advice. What is actually covered, including exclusions, limits and the excess, is set out in the policy conditions and the insurance card (verzekeringskaart) of the insurer; you receive both before you take out cover. Taking out cover without advice? Then read what execution only means for you.
Where things go wrong in practice
Four points that make the difference between a policy that pays out and one that does not.
Unpaid does not mean not liable
The law looks at the office, not at the remuneration. Anyone who accepts appointment as a director of a VvE thereby accepts the standard of proper performance of duties in Article 2:9 of the Dutch Civil Code. Recovery is then against your private assets, because you are not a legal entity yourself. For many residents who took it on out of commitment, that is the unpleasant discovery afterwards.
Deferred maintenance is the classic case
Most complaints against VvE directors concern maintenance left too long. Article 5:126 of the Dutch Civil Code requires the association to maintain a reserve fund for future maintenance. If you put the need to the general meeting and the proposal was rejected, you are in a strong position. If you did not, or only did so orally, it has become your failing.
Decisions outside your mandate
A director may not do everything on his own. Orders above the amount for which the meeting gave authority, taking out a loan or cancelling an insurance policy without a decision are typical sources of personal liability. Check for each act what the division regulations and the house rules allow, and have an authorisation recorded in the minutes before you sign.
Collecting the contributions is a duty of the board
If you let arrears build up and become time-barred, the shortfall ends up with the other owners and they can hold that against you. The same applies to failing to renew the buildings insurance on time or failing to carry out a decision of the general meeting. In this area, failing to act is just as culpable as acting, and often easier to prove.
What does your premium depend on?
Number of apartment rights — The size of the association determines the number of interested parties who can hold a director liable.
Professional managing agent or not — A managing agent with his own cover changes the division of roles and therefore the assessment of the risk.
Age and state of the complex — Older complexes with deferred maintenance more often lead to complaints about postponed repairs.
Up-to-date long-term maintenance plan — A recent plan and a well-filled reserve fund reduce the risk of a complaint about negligent management.
Sum insured per claim — The sum chosen determines up to what amount both the loss and the defence costs are borne.
Current disputes — Existing conflicts or claims at the time of application are excluded and influence acceptance.
Insurers weigh these details differently. That is why comparing pays off.
How we arrange it
You request a quoteWe take stock of your activities, turnover and wishes.
We compareseveral insurers, on premium as well as conditions.
You receive a proposalWith an explanation of the differences and the exclusions.
We arrange the switchIncluding cancellation, so there is no gap in cover.
Customers rate our service on four aspects: personal service, service delivery, availability and the outcome. The reviews are collected and published by NH1816 and come from customers who have actually taken out a policy with Finass Advies B.V. or reported a claim.
Am I really personally liable as a volunteer director?
Yes. Article 2:9 of the Dutch Civil Code applies to every director of a legal entity, paid or unpaid. There is a threshold: personal liability only follows where the director is seriously at fault. But that threshold is assessed on the basis of what you knew, put forward and recorded, and with a volunteer board that is often the most poorly documented part.
Does this insurance cover damage to the building?
No. Damage to the complex itself falls under the association's buildings insurance. Injury or damage to third parties caused by a defect in the building falls under the VvE's liability insurance, under Article 6:174 of the Dutch Civil Code. The directors' cover pays only for the loss arising from your own acts or omissions as a director.
The general meeting rejected my maintenance proposal. Am I then in a strong position?
If it is recorded in writing, yes. A director who puts the need forward with reasons and whose proposal is rejected has thereby performed his duty. The evidence lies in the agenda, the explanatory note and the minutes. If the discussion was only oral, it does not exist afterwards and the complaint of negligence stays with you.
Do I remain liable after I have resigned?
Yes, for the period in which you were a director. A claim can come in years after your resignation, for example if a renovation reveals that maintenance was postponed for years. Because these policies generally work on a claims-made basis, run-off cover is the point to arrange when you resign. Have the board confirm that arrangement in writing.
Finass Verzekert is a trading name of Finass Advies B.V. We advise on and arrange non-life insurance on the basis of an objective analysis of several insurers, and receive commission for this from the insurer, which is included in the premium. You pay no separate advice fee. Before you take out cover, we establish your wishes and needs.
You will find our licence, KvK and Kifid details and our complaints procedure at the foot of every page.
