A heavyweight insurer is asking a Kentucky federal court to decide if it’s on the hook for defending a condo board at the center of a bitter dispute over alleged mismanagement.
On August 5, 2025, Zurich American Insurance Company filed a complaint in the US District Court for the Western District of Kentucky, seeking a ruling that it has no obligation to cover or defend several former board members of the Sherrin Square Condominium Association in Louisville. At stake is whether Zurich’s policy extends to a raft of claims from condo owners, who say the board’s actions left them out of pocket.
Zurich, which stepped in as the successor to Assurance Company of America, says its Precision Portfolio Policy - active from November 1, 2011, to January 1, 2013 - doesn’t stretch to the allegations now being lobbed at the former board. The policy, Zurich argues, was never meant to cover every dispute that might arise in the life of a condo association.
The underlying lawsuit, filed by Daniel J. Guillory III, Andrea Oswald, Sharon Hall, Richard Brown, Debra Nicholson, and David L. Nicholson, targets Richard Levin, Pamela Levin, Erin Levin, and the Sherrin Square Condominium Association itself. The plaintiffs claim the Levins, during their time on the board, breached fiduciary duties and mishandled association funds, causing financial headaches for the community.
But Zurich’s complaint is clear: the insurer says its policy only covers certain losses or “wrongful acts” as spelled out in the contract. Many of the alleged missteps, Zurich contends, either happened after the policy was cancelled or are specifically excluded. The complaint singles out exclusions for intentional acts, conversion (the unauthorized taking of property), and unjust enrichment. Zurich also points to the calendar, noting that some of the alleged conduct occurred after January 1, 2013, when its coverage ended.
Zurich’s filing underscores that the Precision Portfolio Policy was crafted to address specific risks tied to condo association management—not to serve as a catch-all for every possible grievance. The company is asking the court to declare that it owes no duty to defend or indemnify the former board members against the owners’ claims.
It’s worth emphasizing that, at this stage, Zurich’s complaint is just that - a set of claims. The court hasn’t weighed in, and the former board members haven’t yet had their say in this action. The outcome will likely turn on how the judge reads the fine print of the policy and the timing of the alleged acts.
For insurance professionals, the case is a sharp reminder of the complexities that come with directors and officers coverage for community associations. The details matter, and so does the timeline. As this dispute unfolds, the industry will be watching for cues on how far such policies really go when boardroom tensions spill into court.
