What is the difference between a fidelity bond and a crime insurance policy for an HOA?

A fidelity bond is a single insuring agreement — it covers dishonest acts by named officers, directors, or employees. A commercial crime policy is packaged: employee dishonesty, forgery and alteration, computer fraud, funds transfer fraud, and money and securities each get their own insuring agreement. For associations whose main concern is officer or management company theft, a standalone bond may satisfy governing-document or lender requirements. For those that want broader protection — particularly against computer fraud and fraudulent wire transfers — a packaged crime policy covers more ground.

Does my HOA need a fidelity bond if we use a property management company?

Check three sources: your governing documents (CC&Rs and bylaws), any applicable state statute, and any lender requirements tied to financing in your community. In California, Civil Code provisions impose minimum fidelity bond requirements based on budget size. Federally backed mortgage guidelines impose their own requirements. Neither set of requirements goes away because a management company is in place. The management company's own bond is also not a substitute — its terms may not cover association funds the way the association's own policy would. Review your governing documents and state law with your association's counsel. This is general information, not legal advice.

Does the management company's fidelity bond cover association funds if an employee steals from our account?

Often less than associations assume. Management company bonds vary significantly. Some cover client association funds held in trust; others cover only the management company's own money. A shared per-loss limit across all client associations is another common restriction — a large theft from one client can deplete what's available for the rest. Carrying an independent crime policy with a management company dishonesty insuring agreement is the more reliable approach. Then the scope of the association's coverage doesn't depend entirely on a third party's bond terms.

How much fidelity coverage does an HOA need?

Start with the funds actually at risk: operating account balance plus reserve fund balance is the maximum accessible at any point. Annual assessment income represents total fund flow through the accounts and is another common reference. State statutes may set minimum bond amounts. Fannie Mae and Freddie Mac guidelines set coverage floors based on the annual budget and reserves. Those minimums are a floor, not a target. An association with a growing reserve fund should confirm its fidelity limit reflects what's actually in the account — not what was there when the policy was first written.

Are board members personally liable if association funds are stolen on their watch?

That's a legal question that depends on the facts, the governing documents, applicable state law, and whether the board maintained required coverage and exercised reasonable oversight. Your association's counsel is the right resource. This is general information, not legal advice. On the insurance side: fidelity and crime coverage reimburses the association for covered losses, which reduces financial harm to the community. D&O insurance is a separate line that addresses board members' personal risk to governance-related claims. The two work together — neither substitutes for the other.

What is funds transfer fraud coverage, and does our current fidelity bond include it?

Funds transfer fraud coverage responds when a fraudulent instruction causes an authorized officer or employee to send association funds to a fraudster's account. The typical mechanism: a spoofed email or phone call impersonating a vendor, a board member, or a bank contact. Traditional fidelity bonds were built for physical theft. Many older forms don't include a funds transfer fraud insuring agreement. Modern commercial crime policies typically do, sometimes with a sublimit. Review the actual insuring agreements — not just the certificate page. That's the only way to confirm whether this coverage is present.

How does a fidelity bond claim work for an HOA?

Report promptly. Crime and fidelity policies carry reporting conditions, and delayed notification can complicate a claim. Preserve every relevant record: bank statements, transaction histories, cancelled checks, bookkeeping files, and communications tied to the suspected loss. The insurer will assign an adjuster who may request records access, a proof of loss, and coordination with the association's counsel during the investigation. BLIS can help the association understand what documentation the insurer is likely to need and walk through what the general process involves. Claim adjudication is the insurer's function — BLIS handles the coordination.

Does fidelity or crime insurance cover losses caused by an outside vendor who defrauded the association?

Not under the employee dishonesty insuring agreement. That agreement covers dishonest acts by officers, directors, employees, and management company personnel — not external vendors dealing at arm's length. A vendor submitting fraudulent invoices or running a billing scheme is typically a contract law problem, not a crime policy claim. One exception: an insider who helped advance the fraud. A board officer or management company employee who conspired with the vendor may trigger the employee dishonesty agreement, subject to policy terms.

Condos & HOA · Fidelity / Crime

HOA Fidelity and Crime Insurance for Association Funds

Reserve accounts, operating funds, and assessments keep the community running. Fidelity and crime insurance can protect the association from certain theft, embezzlement, forgery, and fraudulent transfers involving covered people or methods.

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Share your contact information and a few basics about your business. A licensed BLIS representative will review your request.

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Submitting this request does not bind coverage or guarantee a quote. BLIS is licensed in California, Nevada, Arizona, Texas, Florida. CA License 0M74955.

Sending this form does not start coverage or guarantee a quote, price, or coverage result. BLIS will review what you send and may ask for a few more details before discussing available options.

What to expect

What to expect after you submit

A BLIS representative reviews what you share, looks at what your business needs, and follows up if an important detail is missing.

We learn how you operate
A licensed BLIS representative reads what you send and gets familiar with your business.
We look at what needs protection
We connect your day-to-day work, property, people, and vehicles with the coverage that may matter.
We fill in the blanks
If something important is missing, we’ll ask a few focused questions instead of sending another long form.
We explain the options
When options are available, we help you compare price, limits, deductibles, exclusions, and policy terms.
We stay available
After coverage starts, BLIS can help with certificates, policy changes, audits, renewals, and claim questions.

Prefer to talk it through? Call (818) 306-8333Monday – Friday, 9:00 AM – 5:00 PM PT

Your operation

What matters when protecting a hoa fidelity / crime business

Association funds pay for roofs, elevators, landscaping, insurance, and future repairs. Board members and management companies may have access to those accounts, and leadership changes can make oversight harder. Fidelity and crime coverage addresses certain financial losses that property and general liability policies do not. BLIS helps boards review account balances, access controls, governing requirements, and policy limits in practical terms.

Money moves through association accounts continuously. Assessments arrive monthly. Reserve contributions accumulate toward capital projects. Project draws go out as work is authorized. At any given point, the treasurer, a management company bookkeeper, or a bank signatory can initiate a transfer. Most associations lack controls that would flag a dishonest transaction in real time.

Monthly reconciliations and quarterly reserve reports can leave months of risk undetected. By the time an audit surfaces the discrepancy, the funds are gone.

Board officers are trusted volunteers. That trust creates access — to bank accounts, check-signing authority, and vendor payment approvals. An officer diverting small amounts to a personal account may do so for months before anyone notices. Overpaying a related vendor is another pattern. Checks to fictitious payees is a third.

The loss often surfaces when a new treasurer reviews the books, or when the association can't fund a project it thought was covered. A fidelity bond can respond to covered theft by officers and directors, subject to policy terms.

Management companies collect assessments, pay vendors, and keep the books. That arrangement puts an external party in ongoing financial control of association funds. Some management companies carry crime coverage that extends to client accounts. But the scope, limits, and conditions vary. Associations rarely see the actual policy language.

An association's own fidelity bond or crime policy closes that gap — and should specifically name management company dishonesty as a covered scenario.

A spoofed email posing as a vendor, a bank contact, or a fellow board member can prompt an authorized officer to wire funds to a fraudulent account. Standard fidelity bonds predate this type of fraud. Many older bond forms have no insuring agreement for funds transfer fraud. Reviewing whether the current policy covers electronic transfer losses is a material step in evaluating association coverage.

Forgery-and-alteration risk is distinct from electronic fraud. A check with a forged signature, an altered invoice redirecting a vendor payment, a fabricated authorization moving reserve funds — these are paper-process losses. Associations still using countersignature requirements or paper checks carry this risk.

The forgery and alteration insuring agreement addresses losses that fall outside both the employee theft and computer fraud agreements.

Governing documents and state statutes in California and several other states impose minimum fidelity bond requirements based on fund volume or assessment levels. Federally backed mortgage guidelines add their own requirements. An association without required coverage may be in breach of its governing documents. That can complicate unit resales and financing.

Review governing documents and applicable state requirements with your association's counsel. This is general information, not legal advice.

Statutory minimums were often set years ago and don't reflect current reserve balances. An association with a large reserve account and a management company handling assessments for hundreds of units may be carrying a limit tied to an outdated statutory floor. The fidelity limit should reflect what's actually at risk: operating account balances, reserve fund balances, and peak monthly assessment volume.

BLIS reviews fund volume as part of evaluating whether the current limit still fits.

A management company that says it has a fidelity bond covering client funds may be right — or only partially right. Many management company bonds cover the company's own money, not client association funds held in trust. The per-loss limit may be shared across all of the company's client associations. A large claim from one client can deplete what's available for the rest.

Relying solely on the management company's bond leaves the association exposed. Carrying independent crime coverage is how you close that gap before a loss forces the question.

Coverage

Coverages commonly considered for hoa fidelity / crime operations

These are common coverages to consider, not a preset package. The right mix depends on how your business works, your contracts, state requirements, and the policy options available.

Employee Dishonesty / Fidelity Coverage
The core insuring agreement. Covers direct financial loss from theft, embezzlement, or misappropriation by officers, directors, employees, and — in many policies — management company personnel acting in a covered capacity. Where financial access is concentrated among a small group and internal controls are limited, this is the insuring agreement that addresses what no other policy in the association program touches. The limit should reflect actual fund risk: operating balances, reserve account totals, and peak assessment volume at any point in the year. A limit set when reserves were lower may not reflect what's at risk today.
Forgery and Alteration
Covers losses from forged or altered checks, drafts, and other financial instruments drawn on association accounts. Associations still using paper checks, countersigned authorizations, or manual invoice approval carry this risk. It's distinct from electronic transfer fraud. Even associations that have modernized most of their processes often retain paper-based legacy procedures that keep this insuring agreement relevant.
Computer Fraud
Covers direct financial loss from unauthorized external access to association banking systems — a hacker penetrating the online banking portal and initiating a transfer. That's different from the employee dishonesty agreement, which covers internal actors, and from funds transfer fraud, which covers social-engineering misdirection. Associations with bank accounts accessible through online portals need to confirm whether their current policy includes this insuring agreement.
Funds Transfer Fraud / Social Engineering
Covers losses from fraudulent instructions that direct an authorized officer or management company employee to send association funds to a fraudster's account. The mechanism is typically a spoofed email or phone call from someone impersonating a vendor, a bank contact, or a board member. Standard crime policies don't automatically include this. It may require a separate endorsement or insuring agreement. Given how often this loss type occurs in property management contexts, confirming whether the current policy addresses it is a material coverage question.
Money and Securities
Covers cash, checks, and negotiable instruments the association holds or has in transit. Think deposits in transit, petty cash, or checks collected at a community event. Typically a smaller piece of the overall crime policy. Addresses the physical-custody scenario that neither the core fidelity agreement nor the property policy reaches.
Commercial Crime Policy (Packaged)
Combines the individual insuring agreements above into a single coordinated form. For associations placing crime coverage for the first time, a packaged policy may offer broader scope than a standalone bond. It typically has clearer insuring-agreement language than older bond forms. BLIS reviews the actual policy form, not just the certificate. That confirms which agreements are present, what limits apply, and whether the scope fits the association's fund risk and governing-document requirements.

What shapes your quote

Details that can affect your quote

These details can affect which options are available and what they may cost. You don't need all of them to start — send what you have, and we'll follow up on anything important that's missing.

Association type: HOA, condominium association, or townhome association. Fund structure, governance model, and state regulatory context differ by type. A self-managed HOA with a volunteer treasurer operating without formal controls looks different to an insurer than a professionally managed condo association.
Total annual assessment income. Assessment volume sets the scale of funds cycling through the association's accounts. It's a primary input for determining whether the fidelity limit is proportionate.
Operating account balance and reserve fund balance. Current balances define maximum risk at any given time. An association with a six-figure reserve carries materially more fidelity risk than one with a minimal reserve. The limit should reflect what's actually sitting in the accounts.
Whether a management company handles funds and what their bond covers. Insurers want to know whether association money flows through a management company's accounts: and whether the management company's own fidelity coverage genuinely protects client funds. If the answer is unclear, that affects how the application is structured.
Management company name and scope of their bond. Management company fidelity bonds sometimes cover only the company's own funds, not client association accounts. Insurers need to understand whether a coverage gap exists before deciding how to write the association's own policy.
Number of officers and signatories with account access: Insurers may review who can initiate transfers, sign checks, or use online banking. Written approval and verification controls help document how access is managed.
Internal controls and financial oversight processes. Dual-signature requirements, monthly bank statement reviews by non-signatories, annual audits, and advisory committee review of transactions are all favorable positive signs. Associations with documented controls present differently than those without.
Prior fidelity or crime claims. Prior losses tell insurers whether the circumstances that produced the claim have been addressed and what the current control environment looks like. History matters more than timeline.
Governing document or state minimum bond requirement. The CC&Rs, bylaws, or applicable state statute may specify a minimum bond amount. An application requesting coverage below that minimum may reflect a compliance gap rather than a deliberate limit decision: and insurers will notice.

Coverage examples

Example claim scenarios

A few situations that show how coverage can respond when something goes wrong. These are examples only — not actual claims, and not a guarantee of any outcome.

Example scenario
Treasurer embezzlement discovered during management transition
A condominium association transitions from self-management to a professional management company. During onboarding, the new management company reviews the past 18 months of bank records. It identifies a pattern of checks written to a vendor whose invoices cannot be located. Further review reveals that the checks were endorsed by the outgoing treasurer and deposited into a personal account.
The loss represents a significant portion of the association operating fund accumulated over the treasurer's tenure. Employee dishonesty coverage in the association's fidelity bond can respond to the covered loss, subject to the policy's terms, conditions, and applicable limits. Prompt reporting to the insurer and preservation of financial records are important steps in the claims process.
Example scenario
Fraudulent wire transfer by management company employee
A property management company employee responsible for disbursements receives an email that appears to come from the association board president. The email requests an urgent wire transfer to pay a vendor threatening to stop work on a capital project. The domain is spoofed — closely resembling the board president's actual email address. The employee initiates the transfer without calling to verify the instruction.
The funds are sent to an account controlled by the fraudster. If the association's crime policy includes a funds transfer fraud insuring agreement, that coverage can respond to the loss — subject to policy terms, conditions, and exclusions. Associations relying on email-only authorization for wire transfers may want to review their verification procedures alongside their crime coverage.
Example scenario
Management company bookkeeper theft across multiple client accounts
A property management company bookkeeper is found to have been diverting small amounts from client association trust accounts. This continued over a multi-year period. The theft surfaces when the management company's annual internal audit identifies account reconciliation discrepancies. The association is informed that it may have experienced a loss.
The management company's own fidelity bond carries a per-claim limit that is shared across its full client roster. After prior clients' losses, the remaining available limit is substantially less than the association's identified loss.
The association's own crime policy, with a management company dishonesty insuring agreement, can respond to the balance of the covered loss, subject to the policy's terms and conditions.
Example scenario
Forged check drawn on association reserve account
A check drawn on an association's reserve account — signed in the name of the association's president — is presented to a vendor and deposited. The president did not sign the check; the signature was forged. The check cleared the bank before the forgery was detected during the following month's reconciliation.
The association files a claim with the bank under the bank's account agreement, which provides limited recovery for forgery losses within a short notice window. The association's crime policy includes a forgery and alteration insuring agreement. It can respond to the covered loss to the extent the bank's recovery does not make the association whole, subject to the policy's terms, conditions, and limits.

The claim scenarios above are illustrative examples only. They do not represent actual clients, actual claims, or guaranteed coverage outcomes. Coverage for any specific situation depends on the policy terms, conditions, exclusions, and the facts of the claim.

After coverage starts

Common certificate and service needs

Once coverage is in place, new contracts or business changes can mean new paperwork. A certificate only summarizes policy information; the policy and its endorsements determine the actual coverage.

Contract and certificate requests

Fidelity bond or crime certificate for governing-document compliance. CC&Rs, bylaws, or applicable state civil code provisions may require the association to maintain fidelity coverage and provide evidence of it. BLIS issues a certificate confirming coverage is in force and specifying the applicable limits.
Lender-required fidelity evidence for Fannie Mae or Freddie Mac mortgage approval. Federally backed mortgage guidelines require qualifying associations to carry fidelity coverage that meets specific conditions. When a unit owner is purchasing or refinancing, the lender may request association fidelity documentation. BLIS provides the evidence and confirms whether the policy meets the applicable requirements.
Management company documentation of association crime coverage. Some governing documents and management agreements require the management company to verify that the association carries independent crime coverage. BLIS provides the documentation the management agreement calls for.
Annual fidelity confirmation for reserve study or audit. Financial auditors and reserve study preparers routinely ask for confirmation that fidelity and crime coverage is current. BLIS provides that documentation as part of the ongoing service relationship.

Ongoing service

Annual limits review as reserves grow. Fidelity limits set when reserves were lower may not cover what's currently at risk. Capital accumulates toward projects for years before a draw happens. BLIS reviews fidelity and crime limits at renewal against current operating and reserve balances to flag whether the limit still reflects actual risk.
Management company transition. When an association changes management companies, a new party with financial access comes in. BLIS reviews the crime policy at that transition — confirming coverage extends to the incoming management company's personnel and identifying any endorsement adjustments needed before the transition closes.
Board officer changes and signatory updates. New board members may be added to bank accounts or payment portals. When access structure changes, the covered-persons scope in the crime policy should be reviewed alongside it. BLIS handles that as part of mid-term policy management.
Governing document review for fidelity compliance. If the association is updating its CC&Rs or reviewing compliance with state civil code provisions on minimum bond amounts, BLIS provides current policy information to support that review. Questions about governing-document compliance belong with counsel — this is general support, not legal advice.
Claim process coordination. When the association suspects a covered loss, prompt insurer notification matters. BLIS helps the association understand what documentation the insurer will likely need and how to preserve records relevant to the claim. The insurer adjudicates — BLIS handles the coordination and communication.
Coverage comparison at renewal. Crime policy forms differ meaningfully between insurers — insuring agreement scope, sublimits, and conditions aren't visible from a declarations page comparison. BLIS reviews the actual policy language when comparing options, not just the premium and limit numbers.

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HOA Fidelity and Crime Insurance for Association Funds

Tell us about your condos & hoa insurance needs

1 / 2About you

What to expect after you submit

We learn how you operate

We look at what needs protection

We fill in the blanks

We explain the options

We stay available

What matters when protecting a hoa fidelity / crime business

Coverages commonly considered for hoa fidelity / crime operations

Employee Dishonesty / Fidelity Coverage

Forgery and Alteration

Computer Fraud

Funds Transfer Fraud / Social Engineering

Money and Securities

Commercial Crime Policy (Packaged)

Details that can affect your quote

Example claim scenarios

Treasurer embezzlement discovered during management transition

Fraudulent wire transfer by management company employee

Management company bookkeeper theft across multiple client accounts

Forged check drawn on association reserve account

Common certificate and service needs

Contract and certificate requests

Ongoing service

Frequently asked questions

In condos & hoa

Related coverage

Take action

Related reading

What HOA Boards Should Know Before Master Policy Renewal

Preparing for a Property Insurance Quote or Renewal

HOA Fidelity and Crime Insurance for Association Funds

Tell us about your condos & hoa insurance needs

1 / 2About you

What to expect after you submit

We learn how you operate

We look at what needs protection

We fill in the blanks

We explain the options

We stay available

What matters when protecting a hoa fidelity / crime business

Coverages commonly considered for hoa fidelity / crime operations

Employee Dishonesty / Fidelity Coverage

Forgery and Alteration

Computer Fraud

Funds Transfer Fraud / Social Engineering

Money and Securities

Commercial Crime Policy (Packaged)

Details that can affect your quote

Example claim scenarios

Treasurer embezzlement discovered during management transition

Fraudulent wire transfer by management company employee

Management company bookkeeper theft across multiple client accounts

Forged check drawn on association reserve account

Common certificate and service needs

Contract and certificate requests

Ongoing service

Frequently asked questions

What is the difference between a fidelity bond and a crime insurance policy for an HOA?

Does my HOA need a fidelity bond if we use a property management company?

Does the management company's fidelity bond cover association funds if an employee steals from our account?

How much fidelity coverage does an HOA need?

Are board members personally liable if association funds are stolen on their watch?

What is funds transfer fraud coverage, and does our current fidelity bond include it?

How does a fidelity bond claim work for an HOA?

Does fidelity or crime insurance cover losses caused by an outside vendor who defrauded the association?

Related pages and next steps

In condos & hoa

Related coverage

Take action

Related reading

What HOA Boards Should Know Before Master Policy Renewal

Preparing for a Property Insurance Quote or Renewal