Civil Code Section 5805 addresses the issue of minimum commercial general liability insurance (CGL) and directors and officers liability insurance. In accordance with California law, it is the policy of the company to require minimum liability coverage of:

• 100 units or less - $2,000,000
• More than 100 units - $3,000,000

Notwithstanding the minimum legal requirements, management of the company believes boards should carry liability insurance of $5,000,000 or more. The additional cost is not substantial compared to the benefits obtained.