Insurance news and information

Flickr Photo Credit: MeijerGardens

It takes just a cursory glance at the news to realize that many organizations have been victims of crime perpetrated by their employees or board members. Tales of treasurers absconding with funds, board members accused of bid rigging, or groundskeepers pilfering equipment abound. There are also numerous incidents of residents, property visitors, or neighbors causing damage or stealing property. There’s no excuse – condo and homeowner associations need crime coverage.

While typically associations purchase fidelity bonds – coverage that responds to employee embezzlement, forgery, or theft – this coverage does not respond to the acts of outsiders not covered specifically under the bond. Also not covered is theft of a client’s property while in the association’s “care, custody, or control.” So if association fees paid are stolen by an outsider from the company vault, fidelity bonds will not respond.

However, most insurers offer optional insurance to cover crimes not covered on fidelity policies. They include:

• Computer fraud
• Extortion
• Forgery/alteration
• Client property liability
• Robbery/burglary
• Theft, disappearance, and destruction

Even with such coverage, policies often limit the amount of loss covered. For example, if a visitor to the property is stealing cars over a 2-year period, some policies will cover the acts, but possibly only to the limits on the current policy. In other words, if the theft amounts to a total of $2,000,000 and the policy limit for the current year is $1,000,000, the insurer may only pay up to the $1,000,000 limit. The previous year’s losses may have to be absorbed by the association. The same holds true for acts committed under a fidelity bond.

Do you know if your association is covered?  Let’s talk and find out what limits exist on your current coverage.