Leni Cummins discussed personal liability and indemnification of board members in Habitat Magazine's Legal Lessons column. While serving on a co-op or condo board can be rewarding, it comes with risks, and understanding the protections available is imperative. Indemnification clauses protect board members if sued and should be broad enough that they cover various claims, rather than only contract-related issues. Older condos may have outdated clauses, in which case the condos’ bylaws should be updated.

Co-ops should not rely on the Business Corporation Law for indemnification since it only applies in certain circumstances. Co-op boards should instead reinforce their indemnification clauses with specific language for consistent coverage. Directors and officers insurance is also crucial for both co-ops and condos because it covers individual board members, not just the board as a whole, and ensures comprehensive coverage. Umbrella policies, particularly in high-stakes environments like New York City, should also be considered to provide additional coverage.

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