ASSOCIATION SHIELD
CONTRACT TERMS AND CONDITIONS
The following terms, conditions and exclusions constitute a contract for the provision of Costs of Defense (as defined herein) by and between Association Shield, LLC (“Association Shield”) and the property owners association (the “Association”) named in a Certificate of Protection issued by Association Shield (a “COP”). The terms, conditions and exclusions contained herein and the COP comprise the Agreement between Association Shield and the Association.
THIS IS A CLAIMS MADE POLICY FOR DEFENSE COSTS ONLY WITHIN THE LIMITS OF LIABILITY AS SPECIFIED BELOW. PLEASE READ IT CAREFULLY AS IT DEFINES YOUR COLLECTIVE RIGHTS, DUTIES AND OBLIGATIONS.
Section I
Definitions
For purposes of this Agreement:
1.1 “Claim” shall mean a lawsuit filed in a Texas Justice Court against the Association or a member of the Association’s Board of Directors (the “Board”) by a member of the Association (a “Member”), who is not an Insured as defined herein, for violation of the Texas Property Code or the Association’s dedicatory instruments.
1.2 “Claim Resolution” shall mean the earlier of: (1) the date a final judgment is rendered by a Texas Justice Court in which a Claim has been filed; (2) the date the Claim is settled by the agreement of the plaintiff in the underlying lawsuit filed in a Texas Justice Court and the Insured(s) that fully resolves all claims asserted in such lawsuit; or (3) the date settlement funds are paid to the Insured by Association Shield as permitted by Section 2.3 below.
1.3 “Costs of Defense” means only the reasonable and necessary legal and other professional fees incurred with the prior written consent of Association Shield (not to be unreasonably withheld or delayed) to defend an Insured(s) from a Claim that is charged by the Retained Attorney. Costs of Defense shall not include out-of-pocket expenses incurred by an Insured(s) or out-of-pocket expenses incurred by the Retained Attorney that are to be paid to third parties, including, but not limited to, filing or recording fees, court costs, investigator fees, expert witness fees, mediator fees, deposition/court reporter fees, process server fees, copy expenses, and mandatory witness fees. Costs of Defense shall also not include any salaries, wages, benefits, overhead expenses or internal costs of any Insured(s).
1.4 “Insured” means the Association and any present member of the Association’s Board of Directors (the “Board”).
1.5 “Loss” means the amount that the Insured(s) becomes legally obligated to pay as a result of a Claim. It includes, but is not limited to, damages, judgments, awards of pre-judgment and post-judgment interest or attorneys fees awarded against an Insured(s), but excludes Defense Costs.
1.6 “Policy Period” means the period set forth in the COP.
Section II
Duty to Defend
2.1 Defense of Claim. In the event of a Claim, Association Shield agrees to hire legal counsel on the Insured’s behalf to defend the Insured(s) from such Claim and to pay all Costs of Defense associated therewith until Claim Resolution has occurred. Notwithstanding anything to the contrary, Association Shield’s duty to defend herein shall be limited to only two (2) Claims during a Policy Period. For purposes of determining the number of Claims, each separate lawsuit filed in a Justice Court shall constitute a separate Claim, regardless of the number of Insureds named in a single lawsuit.
2.2 Retention and Direction of Defense Counsel. Association Shield shall have the absolute right to select and retain an attorney (the “Retained Attorney”) on behalf of the Insured(s) and Association Shield reserves the right to direct the Retained Attorney in the management of the litigation of the Claim. By accepting the benefits under this Agreement, the Association and each Insured authorizes the Retained Attorney to communicate with Association Shield regarding all aspects of the Claim and waives any associated attorney-client privilege associated therewith. Under no circumstances shall Association Shield or the Retained Attorney have any duty to assert any affirmative claims or causes of action against the plaintiff or any other party in the underlying lawsuit on behalf of the Insured(s). Notwithstanding anything to the contrary, neither Association Shield, nor the Retained Attorney, may compromise or settle any Claim without the consent of the Insured(s). Moreover, the Retained Attorney shall not incur any out-of-pocket expenses in the Defense of the Claim without the consent of the Association, which shall not be unreasonably withheld.
2.3 Payment of Costs of Defense. The Retained Attorney shall invoice both the Association and Association Shield for the costs to defend the Insured(s) in the Claim, which shall include both the Costs of Defense and out-of-pocket expenses incurred by the Retained Attorney. Association Shield shall pay the Retained Attorney directly all Costs of Defense, with no deductible owed by the Insured(s), until Claim Resolution has occurred. The Association shall pay the Retained Attorney directly all out-of-pocket expenses incurred by the Retained Attorney.
2.4 Settlement of a Claim. If the Insured(s) refuses to consent to a settlement demand recommended by and acceptable to Association Shield, as determined by Association Shield in its sole discretion, and the Insured(s) chooses to instead continue to defend the Claim, then Association Shield may choose, in its sole discretion, to either (a) pay the Insured(s) an amount equal to the proposed settlement or (b) continue to defend the Claim. If Association Shield elects to pay the settlement demand, then upon tender of such amount to the Insured(s), Association Shield shall be relieved of any further obligation under this Agreement.
2.5 Appeal of a Claim to County Court. In the event Claim Resolution has occurred by the rendering of a final judgment by a Texas Justice Court in which the Claim is filed and such underlying lawsuit is appealed to a Texas County Court, the Insured(s) shall be responsible for contracting directly with the Retained Attorney or with another attorney of the Insured’s choice at the Insured’s expense to represent the Insured(s) in the appeal of such lawsuit. Association Shield shall never have an obligation to pay for any attorneys fees or Costs of Defense once Claim Resolution has occurred.
2.6 Notification of a Claim. If an Insured(s) learns of a Claim, the Insured(s) shall provide Association Shield with written notification and documentation of the Claim within five (5) days. Failure to provide timely and proper notification of a Claim will release Association Shield from any obligation to hire counsel on Insured’s behalf to defend a Claim. Notwithstanding anything to the contrary, if an Insured(s) fails to provide Association Shield with timely notice of a Claim and a default judgment is rendered against an Insured(s) in the underlying lawsuit, the rendering of the default judgment shall constitute Claim Resolution and Association Shield shall be relieved of any further obligation under this Agreement. A Claim may be submitted to Association Shield through its website (www.association-shield.com) or by email (claims@association-shield.com).
2.7 Cooperation of Insured(s). The Insured(s) shall provide to Association Shield and/or the Retained Attorney all information, assistance and cooperation that Association Shield or the Retained Attorney may reasonably request and shall do nothing to prejudice the defense of the Claim and shall assist Association Shield and the Retained Attorney with defense of the Claim. Such duty of cooperation includes a duty upon the Association to consent to and pay all out-of-pocket expenses incurred by the Retained Attorney in the defense of the Claim that are necessary to comply with any court order, statutory law or local court rules (such as a mediator’s fee in a court-ordered mediation) or that are deemed reasonably necessary for the defense of the Claim.
2.8 Limitation on Liability. Association Shield’s sole duty under this Agreement concerning a Claim is to hire Retained Attorney and pay Costs of Defense until Claim Resolution has occurred. Association Shield is not responsible for any act or omission of the Retained Attorney. Association Shield is not a law firm and it is not your attorney. The Association acknowledges that Association Shield has not made and does not make any representation, warranty or guaranty with regard to the outcome or result of any legal proceeding arising out of a Claim. Association Shield’s liability under this Agreement is limited to the refund of the contract price paid by the Association under this Agreement, and in no event shall Association Shield be liable for consequential, incidental, statutory, exemplary or punitive damages. IN NO EVENT WILL THE ASSOCIATION OR ANY INSURED(S) HAVE ANY BENEFITS UNDER THIS AGREEMENT UNTIL ASSOCIATION SHIELD RECEIVES PAYMENT OF THE POLICY PREMIUM.
2.9 Exclusions. Specifically excluded from the scope of this Agreement are Claims that arose prior to the Policy Period. This Agreement DOES NOT INCLUDE AND DOES NOT COVER any services or expenses other than Costs of Defense incurred until Claim Resolution has occurred. Each Insured is directly responsible for, and agrees to pay, all other out-of-pocket costs and expenses incurred by the Insured(s) or the Retained Attorney as a result of the Claim directly to the party to whom the expenses are payable or to the Retained Attorney. These expenses and services may include, but are not limited to, postage, filing fees, court costs, investigator fees, expert witness fees, mediator fees, deposition/court reporter fees, process server fees, copy expenses, travel expense, mandatory witness fees, and any other out-of-pocket costs or fees. In no event shall Association Shield or the Retained Attorney be required to advance any costs or expenses on behalf of the Insured(s). Further, this Agreement does not create any duty owed or liability against Association Shield in favor of an Insured’s heirs, spouse, beneficiary, co-owner, dependents or the like. THIS AGREEMENT DOES NOT PROVIDE ANY BENEFITS FOR ANY LIABILITY, DAMAGES, OR ANY RELIEF, AWARD, COST OR EXPENSE OF ANY TYPE OTHER THAN THE COSTS OF DEFENSE INCURRED IN DEFENDING A CLAIM UNTIL CLAIM RESOLUTION HAS OCCURRED. THIS AGREEMENT DOES NOT OBLIGATION AND ASSOCIATION SHIELD HAS NO DUTY TO INDEMNIFY THE ASSOCIATION OR ANY INSURED FOR ANY JUDGEMENT, FINE OR PENALTY RENDERED AGAINST ANY INSURED AS A RESULT OF THE CLAIM.
Section III
General Provisions
3.1 Assignment. The Association may not assign this Agreement or any right or obligation of this Agreement, by operation of law or otherwise without prior written consent of Association Shield. Association Shield may assign this Agreement at any time.
3.2 Parties to the Agreement. The parties to this Agreement shall constitute Association Shield and the Association. Notwithstanding that a member of the Association’s Board may be an insured party under this Agreement, in no event shall any member of the Board or any Insured(s) (other than the Association) be considered a party to this Agreement or a third-party beneficiary under this Agreement.
3.3 Changes to Terms and Conditions. Association Shield may from time to time change these terms and conditions. In the event Association Shield makes changes to its terms and conditions, it will notify the Association, in writing, of any changes and such changes shall automatically apply to any subsequent or renewed policy period.
3.4 Term of Agreement with regard to Claims. The term of this Agreement (with regard to Claims) shall commence once Association Shield has received the premium fee and shall continue for the period of time specified in the COP, at the end of which time it will terminate automatically without the action of any party.
3.5 Contact. The Association and Insured(s) may contact Association Shield at the mailing address or email address listed below:
Association Shield, LLC
4301 Westbank Drive, Suite A-150
Austin, Texas 78746
Email: info@association-shield.com
For purposes of providing notice to the Association and Insured(s) under this Agreement, any notice sent to the Association at the email address provided by the Association to Association Shield or to the mailing address of the Association’s registered agent according to the records of the Texas Secretary of State’s Office or to the mailing address or email address of the Association according to its most recently recorded management certificate shall constitute effective notice to the Association and all Insureds.
3.6 Venue and jurisdiction. Exclusive venue for any action for the enforcement or interpretation of this Agreement shall be Travis County, Texas. By entering into this Agreement and accepting its benefits, the parties hereby agree that they are subject to the jurisdiction of the state and federal courts of the State of Texas.