A federal District Court in California has held that the directors and officers coverage in another homeowners’ association insurance policy does not protect against a claim for breach of an employment contract. The Forest Meadows Owners Association was sued after its president terminated a security guard and it expended more than $270,000 in legal fees and costs to defend the action. The carrier refused to defend or pay. The policy provided a defense of a “wrongful act,” but defined a wrongful act as “any negligent acts, errors, omissions or breach of duty directly related to the operations” of the association. The Court found that the policy referred only to negligence, and that the...