Insurance policy or fidelity bond

Started by TheI • 5 replies • 1350 views

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TheI (Florida)
Posts: 40

Posted:

The new Fl Statutes that went into effect on July 1, 2013. One of the new laws, 720.3033(5), says an insurance policy or fidelity bond must be purchased for certain people on the board. Does anyone know how long we have to purchase this insurance? Right away or by next year? And am I right in assuming that the provision saying this insurance can be waived at a "meeting of the association" that is referring to a members meeting and not a board meeting?
Thanks

GlenL (Ohio)
Posts: 5,491

Posted:

The way I read it it means now, not next year. And yes it would take the majority of the HOA to waive it and they would have to do it every year. The insurance is not that expensive.

(5) The association shall maintain insurance or a fidelity bond for 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. As used in this subsection, the term “persons who control or disburse funds of the association” includes, but is not limited to, persons authorized to sign checks on behalf of the association, and the president, secretary, and treasurer of the association. The association shall bear the cost of any insurance or bond. If annually approved by a majority of the voting interests present at a properly called meeting of the association, an association may waive the requirement of obtaining an insurance policy or fidelity bond for all persons who control or disburse funds of the

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TimB4 (Tennessee)
Posts: 21,059

Posted:

TheI,

We have purchased a Crime Policy that acts as our fidelity bond.
VA law mandates the minimum amount that has to be carried. I don't know if FL does the same.

We recently (last month) received two quotes.

For a $75,000 policy it was $373 per year
For a $150,000 policy it was $444 per year

JohnC46 (South Carolina)
Posts: 14,265

Posted:

I am not nor do I play a lawyer.

I would think the reading is a years worth of dues plus all money in the BOD's control. $50K in dues, $400K (reserves) for a total of $450K needing bonding.

GlenL (Ohio)
Posts: 5,491

Posted:

Especially given the number of news articles where either the MC or a Board member has embezzled HOA funds. Our CC&R's require a bond for each Board member and for the MC to provide one at their expense and requires the underwriter to notify the HOA ten days before it can be modified or terminated.

Studies show that 5 out of 4 people have problems with fractions

TimB4 (Tennessee)
Posts: 21,059

Posted:

Glen brings up a good point.

Our policy only covers employees and volunteers.

It does not cover independent contractors or management companies.

They would be required to obtain their own insurance/bond.

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