Insurance covering the directors of the syndicate in relation with the consequences of their liability as directors, more particularly on account of damages caused to third parties as a consequence of faults committed in the execution of their duties for the syndicate. It is subscribed by the syndicate and the premium related thereto is a common expense.
The director of the syndicate plays a strategic role within the immovable. Usually appointed by the Meeting of the co-owners, he is a member of the Board of Directors of the syndicate. Its duties are to make decisions on the directions and priorities of the Syndicate. Such Decisions are without limitation for the purpose of the preservation of the immovable and also the management and maintenance of common portions.
Moreover, he is responsible for protecting the rights of the immovable or the syndicate. In that regard, he must ensure the respect of the declaration of co-ownership by the co-owners, the lessees and the occupants of the building. The Civil Code of Quebec and the constituting act can also impose duties, obligations and responsibilities to the director.
Your co-ownership is exposed to various risks, such as fire, water damage, theft and vandalism. When a loss occurs, the insurance of the co-ownership covers the immovable and the civil liability of the syndicate of co-owners.
The syndicate has the obligation to subscribe this type of insurance. The Law and the vast majority of declarations of co-ownership make it compulsory. The insurance contract describes the guarantees offered, their limits, exclusions, and the amounts of the deductibles.
The director plays a leading role in a co-ownership. As a mandatary of the syndicate of co-owners, he ensures the smooth running of the immovable’s day to day business, which implies a working knowledge of the tasks related to this key function. As such, directors must act with prudence, diligence, honesty and loyalty, and never lose sight of the co-owners community interests.
An inescapable clause in most insurance policies, the deductible is an amount an insurer subtracts from the indemnities. The insured, in this case your syndicate of co-ownership, must then assume a portion of the cost of the building's repairs , from its working capital , or by the means of a special assessment (working capital call).
I have been a director for a few days.
Question: Do I have the obligation to personally take out liability insurance?
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The civil liability of a director for the tasks incumbent upon him is largely unrecognised. It should be noted that failure to act with prudence, diligence, honesty and loyalty in the performance of his duties may engage his personal liability. A director must always keep in mind the interest of the co-owners' community. Thousands of Quebecers who sit on an annual basis on a Board of Directors, such as yourself perhaps, are unaware of this reality.