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When a condo development in Georgia consists of over 20 units, we require that the Homeowners Association (HOA) carry Fidelity (Employee Dishonesty) Insurance. This insurance coverage is essential to protect the financial interests of the HOA and its members. The coverage must be for the maximum amount and must cover the maximum amount of funds carried by the HOA’s accounts.
In some cases, reduced coverage may be considered if certain requirements are met. These requirements include having at least 2 Board members sign any checks disbursed, maintaining separate accounts for reserves and operating expenses, and ensuring that the HOA does not have direct authority to disburse any funds but uses an independent firm.
Fidelity Insurance is designed to protect against losses resulting from dishonest acts committed by employees or volunteers within the HOA. This type of insurance provides coverage for theft, embezzlement, forgery, and other fraudulent activities that may occur within the organization.
By requiring Fidelity Insurance for condo developments with over 20 units, we aim to mitigate the risks associated with financial mismanagement and fraud. This requirement helps to safeguard the financial stability of the HOA and provides peace of mind to its members.
It is important for HOAs to understand the specific insurance requirements in Georgia to ensure compliance. Failure to maintain the necessary insurance coverage could result in financial penalties or other consequences for the HOA.
Fidelity Insurance is a crucial component of risk management for condo developments with over 20 units. By adhering to the insurance requirements, HOAs can protect themselves and their members from potential financial losses due to employee dishonesty. Remember, it’s always better to be safe than sorry when it comes to protecting the financial well-being of your community.
