Timothy Cline Insurance Agency, Inc.
Homeowner Associations »
Introduction
A fidelity bond protects an employer from financial loss due
to dishonest acts of a covered employee. For a loss to be covered
the employer must lose money and the employee must either obtain
a financial benefit from the act. The loss can be the result
of the employee's theft of money, securities, or other property
of the insured. In general employee dishonesty policies are
written on a blanket basis, so that all employees are covered.
Millions of dollars are lost every year due to employee dishonesty.
Businesses suffer severe financial damage and can end up in bankruptcy.
Some instances are one-time theft occurrences, but the large
losses result from long-term, ongoing schemes that go undetected
for months, and sometimes years. While a Homeowners Association
doesn’t deal with the kind of funds multi-million dollar
businesses have, the large reserve account balances make homeowners
associations susceptible to fraudulent acts and monetary losses.
Property written, a fidelity bond covering a homeowners association
has an endorsement which redefines the insured to include the
board members as “non-compensated employees” of the
Association. It is also especially important that an endorsement
is added which extends coverage to the management agent.
1/3 of all employees admitted to
stealing
from their employers in the previous year.