Top Risks Leading to Discrimination Claims Against Community Association Boards
Discrimination accounts for roughly 15% of all directors & officers liability claims in community associations, based on CNA claims data from 2024—a statistic that often surprises even seasoned insurance professionals.
“Over time, the percentage of D&O claims related to discrimination has stayed fairly consistent,” says Josh Srnka, a community association D&O specialist with Aon Affinity Insurance. “There have been spikes tied to major events such as the COVID-19 pandemic, but overall discrimination claims are a steady part of the community association D&O claims landscape.”
The risk is baked in. Community associations sit at the intersection of governance and home life, where board decisions shape how residents experience fairness.
“A board can think they’re doing everything right and still get sued,” Srnka says. “How the board responds, the tone it takes and residents’ perception of fairness all factor into whether a situation escalates.”
Unlike traditional organizations, community associations, such as condominiums, cooperatives and homeowners associations, are governed by volunteers who rotate in and out of leadership. For many, the leap from routine community management to legal exposure is sudden.
“People step into leadership roles to serve their communities,” Srnka says. “They’re not expecting that everyday governance decisions could expose them to litigation.”
Those risks are heightened by the emotionally charged day-to-day decisions these boards make, often without the formal infrastructure most businesses rely on. Even routine decisions can escalate into allegations of unfair treatment.
Service and support animal requests are a common source of discrimination allegations, but exposure extends well beyond accommodation issues. Claims also arise from selective enforcement, leasing restrictions, architectural approvals and how boards respond to resident concerns—situations where perception often plays a decisive role, Srnka explains.
“A lot of these claims aren’t about the rules themselves,” Srnka says. “They’re about how decisions are carried out. Consistency, documentation and communication matter just as much as the policy on paper.”
From a coverage standpoint, these allegations fall squarely within the intent of D&O insurance, which is designed to protect both the association and individual board members against claims of mismanagement or wrongful acts. Defense costs alone can be significant, even when claims lack merit. However, Srnka cautioned that not all D&O policies respond the same way.
One of the most common misconceptions is assuming that all discrimination claims are automatically covered.
“In community associations, third-party discrimination is critical,” Srnka says. “That’s when a resident brings a claim against the board or association—not every policy includes that coverage, so agents need to make sure it’s there.”
Agents can also play a key role in identifying governance patterns that may indicate elevated risk. Repeated disputes involving similar issues, selective enforcement concerns, limited board training or personality-driven decision-making can all be red flags, Srnka says. While professional management companies can help stabilize governance in this regard, inconsistencies in how policiesare implemented can still affect exposure.
Looking ahead, Srnka expects discrimination allegations to remain a persistent driver of D&O claims, shaped by increased social awareness and the growing accessibility of litigation.
“These issues aren’t new,” he says. “But expectations around fairness and transparency are higher and that makes having the right coverage—and the right conversations—more important than ever.”
Visit Ian H. Graham Insurance to learn more about how they support community associations with specialized D&O liability coverage.
