Directors of residential property blocks take on a critical role — often voluntarily — managing the day-to-day operations and finances on behalf of leaseholders. This includes handling service charges, overseeing maintenance, and making key decisions affecting residents and the property. Despite their best efforts, these directors can be held personally liable for the decisions they make — this is where Directors & Officers (D&O) insurance becomes essential.
If a leaseholder believes a director has not acted correctly, they can bring legal action personally — this may include complaints around service charge use, maintenance decisions, or neighbour disputes.
Case example: a group of leaseholders brought a claim against their block's directors over alleged misuse of service charges. The case went to the First Tier Tribunal, which ultimately ruled the directors had acted properly — but legal defence costs were more than £90,000. A management liability policy was in place, with the insurer covering the defence costs throughout.
Being a director of a residential property block is a serious responsibility, even unpaid. Things can go wrong even when acting in good faith, and legal claims can arise without warning. D&O insurance isn't a box-ticking exercise — it's a financial safety net.