Crime/Fidelity Bond for Condo Associations
Protect Your Association From Dishonest Employees
A basic fidelity bond covers employee dishonesty, which in the case of a Condo Association can also extend to the property manager who often manages large sums of money for the Association. Additional coverage can be included for forgery and alteration, computer fraud, funds transfers, and other methods of embezzlement.
Does My Condo Association Need A Crime Policy?
A Crime Policy or Fidelity Bond is required by Florida Statute for the maximum amount of money the Association has on hand at any one time throughout the year. This means the amount of coverage must be greater than or equal to the maximum amount of money the Condo Association has in its operating and reserve accounts at their highest point throughout the year to be in compliance with Florida Statute. Your operating and reserve accounts can vary significantly each year.
Does your insurance agent ask you each year what your projected balances will be?
If not, you may be overpaying for coverage you do not need or you may not be in compliance with Florida Statute.
Another trend we are seeing as it relates to the requirement for Fidelity Bonding for an association is that more and more banks are requiring proof of compliance and bonding before they will finance or refinance a condo unit. Fannie Mae and Freddy Mac insist on verification of the fidelity bond as part of their compliance requirements.
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