HOA glossary · F
Fidelity Insurance
What is fidelity insurance in an HOA context?
Fidelity insurance, also called a fidelity bond, protects the HOA against financial loss from dishonest acts such as fraud, theft, or embezzlement by board members, employees, or other individuals who handle the association’s funds.
Why is fidelity insurance important?
Many HOAs are led by unpaid volunteers with little to no formal financial training. Fidelity insurance gives the community peace of mind that, if funds are misappropriated, there’s a mechanism to recover them.
How can you use “fidelity insurance” in a sentence?
We’ve had some issues with boards and management companies in the past, but thanks to a new group of volunteers and a good fidelity insurance policy, our neighborhood association is back on track.
Related terms
- Insurance DeductibleAn insurance deductible is the amount the HOA must pay out of pocket before their insurance policy kicks in after a covered event.
- Restrictive EndorsementsA restrictive endorsement limits how a check can be deposited or used, such as marking it for deposit only, to help protect HOA funds.
- Master PolicyA master policy is the community association's insurance policy that covers common areas and, in some cases, structural elements of buildings.
- HOA Budget TemplateAn HOA budget template is a pre-made spreadsheet or document that helps the board plan annual income, expenses, and reserve funding.
