Insurance protecting the HOA against financial loss from employee or officer theft or fraud.
A fidelity bond (also called a fidelity insurance policy or crime coverage) protects the HOA against financial loss caused by employee dishonesty, embezzlement, or theft — whether by a board officer, employee, or management company employee who handles HOA funds. The bond must be in an amount sufficient to cover the maximum risk of loss — typically at least three months of operating expenses plus the reserve fund balance. Many state laws and some lender requirements mandate that HOAs carry fidelity coverage. Management companies should carry their own fidelity bond covering their employees' handling of client funds, and the HOA's management agreement should require proof of such coverage.
HOA funds have been embezzled in communities large and small — the fidelity bond is the financial backstop when this happens. Without it, the community may lose funds with no means of recovery.
Master Policy
The HOA's primary insurance policy covering the building structure and common areas.
D&O Insurance
Directors and Officers liability insurance protecting board members from personal liability for governance decisions.
Audit
An independent review of the HOA's financial records to verify accuracy and compliance.
Management Agreement
The contract between the HOA and a professional management company defining services, fees, and responsibilities.
LotWize handles fidelity bond tracking automatically — along with violations, ARC requests, meeting minutes, and homeowner communications, all in one platform built for self-managed HOAs.
Start 14-Day Free TrialThis page provides general information only — not legal or financial advice. HOA laws vary by state and community. Always consult your governing documents and an HOA attorney for guidance specific to your situation.