Pursuant to changes in Florida law (720.3033) a fidelity bond for homeowners associations must be maintained and the HOA’s directors must meet certain educational requirements. The statute states that, “The association shall maintain insurance or a fidelity bond for all persons who control or disburse funds of the association. The insurance policy or fidelity bond must cover the maximum funds that will be in the custody of the association or its management agent at any one time. As used in this subsection, the term “persons who control or disburse funds of the association” includes, but is not limited to, persons authorized to sign checks on behalf of the association, and the president, secretary, and treasurer of the association. The association shall bear the cost of any insurance or bond. If annually approved by a majority of the voting interests present at a properly called meeting of the association, an association may waive the requirement of obtaining an insurance policy or fidelity bond for all persons who control or disburse funds of the association.” The law recognizes the fiduciary relationship between an officer, director, or manager employed by the association and the unit owners, and that certain financial assurance should be available to homeowners that suffer a loss of assessments or other monies due to a manager’s dishonest acts.
A “fidelity bond”, also known as a commercial crime policy, is essentially a “dishonesty policy”. These bonds protect from losses of company monies, securities, and other property from fiduciaries who have a manifest intent to cause the association loss. These forms can be very broad and cover other exposures such as burglary, general theft, computer theft, disappearance, forgery, etc. Typical HOAs rarely have large sums of cash on hand therefore fidelity bond limits are usually low and the corresponding premiums very reasonable.
Florida fidelity bond leader, Surety One, Inc., specializes in underwriting fidelity risks for ALL business sectors. Fidelity bonds for HOAs, COAs and related classes are welcomed. We NEVER turn away an applicant. For more information visit us at SuretyOne.com, call (787) 333-0222 or (800) 373-2804, or email us at Underwriting@SuretyOne.com for a fidelity bond for homeowners association application or for any fidelity coverage need.
