Fidelity Bond Insurance Fidelity Bond Coverage

The following requirements apply for fidelity bond coverage: Required for all projects with over 20 units. When required, the HOA must have blanket fidelity bonds for anyone who either handles or is responsible for funds that it holds as administrators, whether or not the administrator receives compensation for services. o o o The bonds should name the HOA as the insured, The premiums should be paid as a common expense by the association, and The amount of fidelity coverage must equal no less than the maximum amount of funds in the custody of the HOA or its management firm at any one time or coverage that meets the state's statutory fidelity bond requirements if documented A management agent that handles funds for the HOA should be covered by its own fidelity insurance policy which must provide the same coverage required of the HOA. If the HOA or management firm adheres to at least one of the following controls, then the amount of fidelity insurance coverage can be reduced to equal at least 3 months of assessments on all units in the project: Maintains separate accounts for the operating budget and the reserve fund with copies of the monthly statements sent directly from the bank to the HOA, or Two or more board members must sign any check drawn on the reserve fund account, or Separate records and accounts are maintained for each HOA using the management firms services and the management firm does not have the authority to draw checks or transfer funds from the HOA reserve account

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