CONDOMINIUM FIDELITY INSURANCE

The Florida Condominium Act requires that the association maintain adequate insurance or fidelity bonding of 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. Therefore, it is important for the board to take note of fluctuations in the association’s accounts. For many reasons, which could include the receipt of insurance proceeds or the receipt of special assessments, or just due to the accumulation of reserve accounts over time, the association’s funds may grow to a large amount that far exceeds the amount of the insurance coverage. Therefore, the board should review and adjust fidelity bond insurance coverage on an annual basis. Coincidentally, it should be noted that the Florida Homeowners’ Association Act does not contain a requirement for fidelity bonding. However, a homeowners’ association board would be well advised to obtain a fidelity bonding and other crime coverage on behalf of its association.

We at Swimmer Law Associates, P.A., are experienced in issues such as those described above. Should your association wish to discuss the situation, please feel free to contact us for help.