HOA FIDELITY &CRIME INSURANCE
PROTECTING ASSESSMENT FUNDS, RESERVES, AND OPERATING CAPITAL FROM INSIDE AND OUTSIDE THEFT.
EVERY PERSON WITH ACCESS TO ASSOCIATION MONEY IS A FIDELITY EXPOSURE.
A community association collects assessments, maintains reserve accounts, and manages operating funds — hundreds of thousands or millions of dollars passing through accounts that board members, treasurers, employees, and management companies can access. Fidelity bonds protect the association when someone with access steals. Crime coverage extends protection to outside threats like wire fraud and social engineering.
Volunteer treasurers with bank account access create the most common fidelity exposure.
Third-party managers handling assessments and paying vendors must be covered by the bond.
On-site staff with petty cash, purchasing authority, or vendor payment access.
Wire fraud, phishing, and social engineering targeting association accounts.
TAP EACH SCENARIO TO SEE HOW THE BOND RESPONDS.
Association funds are vulnerable in multiple ways. Tap each theft type to see the coverage response.
SIZING THE FIDELITY BOND CORRECTLY.
Three months of assessments plus total reserves — or the maximum funds on hand at any time during the policy period, whichever is greater.
The bond must extend to cover management company employees with access to association funds — not just board members.
Wire fraud and phishing attacks are not covered by standard fidelity bonds. A separate endorsement or crime policy fills this gap.
Assessment amounts, reserve balances, and the number of people with fund access all change. The bond limit must keep pace.
THE BOND LIMIT MUST REFLECT THE ACTUAL MONEY AT RISK.
Many associations carry the Fannie Mae minimum and stop there. But if the association holds a large replacement reserve, collects special assessments, or manages a capital improvement project, the funds on hand can spike well above the minimum formula. A fidelity bond sized at three months of assessments plus a hundred thousand in reserves does not help when the reserve account holds six hundred thousand during a major project. Kelly Insurance Group reviews the association's actual cash flow cycle, identifies the peak balance, and sizes the bond to cover the maximum exposure — not just the minimum requirement.
We also ensure the bond extends to every individual with fund access, including self-managed boards where volunteer treasurers handle the money directly, and master/sub structures where management companies access funds at multiple levels.
FIDELITY & CRIME COVERAGE — ANSWERED.
WHAT DOES AN HOA FIDELITY BOND COVER?
Financial losses from dishonest acts by anyone who handles association funds — board members, employees, volunteers, and management company staff. Includes embezzlement, theft, unauthorized transfers, forgery, and diversion of reserves.
HOW MUCH FIDELITY BOND COVERAGE IS NEEDED?
Fannie Mae requires the greater of three months of assessments plus reserves or the maximum funds on hand at any time. The bond should cover the highest balance accessible to any single individual.
DOES THE BOND COVER THE MANAGEMENT COMPANY?
The bond should extend to management company employees with fund access. If the management company carries its own bond, verify it covers the association's specific accounts with adequate limits.
WHAT IS THE DIFFERENCE BETWEEN FIDELITY AND CRIME COVERAGE?
Fidelity covers insider dishonesty. Crime is broader — computer fraud, wire fraud, social engineering, forgery, and outside theft. Most associations need both for full protection.
WHAT IF THE TREASURER EMBEZZLES FROM RESERVES?
The fidelity bond reimburses the association up to the bond limit. A police report is required. Civil recovery from the individual is a separate process.
DOES THE ASSOCIATION NEED CYBER CRIME COVERAGE TOO?
Wire fraud and phishing scams targeting association accounts are increasingly common. Standard fidelity bonds may not cover these. A social engineering or cyber crime endorsement fills this gap.
PROTECT THE MONEY YOUR COMMUNITY TRUSTS YOU WITH.
Kelly Insurance Group sizes fidelity bonds to the actual funds at risk — not just the minimum formula. Since 1881.
The availability of coverage and eligibility for coverage can depend on numerous factors. We cannot guarantee that all customers, individuals, and businesses looking for coverage will be successful in these efforts when contacting our team. All policy coverages and terms need to be fully reviewed by the respective consumer to ensure the coverage asked for is what is specifically being quoted or provided by any insurance policy. Insurance Policies, Coverage Changes, and their terms and conditions are not bound or altered until written confirmation is provided by one of our licensed team members or underwriters. This page does not offer legal advice, legal opinions, or policy interpretations. Rather, this page is meant as a resource to help provide customers and insurance consumers with additional considerations that may help in their insurance buying or pursuit of insurance information. Kelly Insurance Group does not employ or direct attorneys.
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Disclaimer: Coverage availability and eligibility may depend on underwriting review, carrier guidelines, policy terms, state requirements, business operations, risk characteristics, and other information provided during the application or quoting process. Kelly Insurance Group cannot guarantee that every individual, customer, organization, or business seeking coverage will qualify for, receive, or successfully place insurance coverage. All policy coverages, exclusions, conditions, limits, endorsements, and terms should be carefully reviewed by the consumer, insured, or applicant to confirm that the coverage requested is the coverage being quoted, offered, or provided. Insurance coverage, policy changes, endorsements, cancellations, and other policy terms are not bound, changed, confirmed, or altered unless and until written confirmation is provided by a licensed Kelly Insurance Group team member, the applicable insurance carrier, or an authorized underwriter. This page is provided for general informational purposes only and does not provide legal advice, legal opinions, insurance coverage opinions, or policy interpretations.