If directors of a homeowner association are sued for failing to purchase workers' compensation insurance, most 0&0 policies exclude claims for being under-insured. They use a "failure to maintain insurance" provision within their D&O policy to deny coverage.

The pricing of D&O coverage does not anticipate being the ultimate catch-all policy for every instance where the board failed to purchase coverage. If the D&O insurance carrier were to provide such coverage, there would be no way for the actuaries to price the coverage. Also, the board would have no reason to purchase any insurance. They could simply maintain the best D&O policy available (with the highest limits) and hope for the best.