Jan 30 2026 19:04

From Board Decisions to Fraud: Community Association Insurance Explained

Essential Protection for Today’s HOA & Condo Risks

 

Community Associations face a growing list of exposures—from governance disputes and employment issues to fraud, theft, and social engineering losses. As claims frequency and litigation trends continue to rise, Management Liability (D&O/EPLI) and Crime coverage have become critical components of a well-designed insurance program for community associations.

 

For insurance agents working with HOAs, condo associations, and other shared-interest communities, this coverage offers a powerful solution to protect board members, association funds, and the community’s reputation.

 

Why Community Associations Need Management Liability & Crime Coverage

 

Volunteer board members are routinely asked to make complex decisions involving finances, enforcement of governing documents, architectural approvals, employment matters, and vendor contracts. Even well-intentioned decisions can result in allegations of wrongful acts, discrimination, or mismanagement.

 

At the same time, community associations are increasingly targeted by embezzlement, employee theft, and social engineering fraud, often resulting in devastating financial losses.

 

Management Liability and Crime insurance work together to help protect against these real-world risks.

 

Designed for a Wide Range of Community Associations

 

Built specifically for community associations, this coverage responds to the legal, employment, and crime exposures commonly faced by HOAs and condo boards. It provides targeted protection where traditional commercial policies often fall short.

 

Eligible Types of Associations

This coverage is ideal for many types of associations, including:

  • Homeowners’ Associations (HOAs)
  • Condominium Owners’ Associations
  • Cooperative Housing Associations
  • Timeshare & Interval Associations
  • Condo/Hotel Associations
  • Commercial & Professional Associations
  • RV & Resort Associations

 

Ideal Risk Profile for Placement

This program is a strong fit for community associations that meet the following underwriting guidelines:

  • 1,000 units or fewer
  • Average unit value of $2M or less
  • Five (5) or fewer employees(excluding property management staff)
  • Less than 20% of owners delinquent on dues
  • No single owner/entity owns more than 30% of units
  • No prior claims
  • Fully completed construction

 

Agents with clean, well-managed associations in their book will find this an especially competitive solution.

 

Management Liability Coverage Highlights (D&O / EPLI)

 

This policy is built specifically for community association exposures and includes robust protections.

 

Key Features Include:
  • Full prior acts coverage
  • Duty to defend
  • Broad “Insured” definition, including property management firms
  • First- and third-party Employment Practices Liability (EPL)
  • Breach of contract defense costs
  • Defense for non-monetary claims
  • 80/20 softened hammer clause
  • No “failure to maintain insurance” exclusion
  • Punitive damages, where insurable by law
  • Defense for Architectural Review Board decisions

 

Optional Enhancements Available:
  • Additional Defense Limit
  • Wage & Hour Defense
  • Workplace Violence & Reputation Expense coverage
  • Immigration Defense coverage

 

These options allow agents to tailor coverage based on the size, governance structure, and employment exposures of each association.

 

Crime Coverage Highlights: Protecting Association Funds

 

Crime insurance is a critical companion to Management Liability, addressing one of the most common and costly loss types for community associations.

 

Key features include:
  • Employee Theft coverage
  • Optional Property Management Employee Theft coverage
  • Social Engineering Fraud protection
  • Loss Discovered form

 

Additional Crime Coverages Include:
  • Premises & In-Transit coverage
  • Forgery protection
  • Computer & Funds Transfer Fraud
  • Money Order & Counterfeit Currency Fraud
  • Credit Card Fraud
  • Client Coverage
  • Personal Accounts Protection
  • Telecommunication Fraud
  • Expense coverage

 

Together, these protections help safeguard reserve funds, operating accounts, and assessment income.

 

Why Agents Place This Coverage

 

For insurance agents, Management Liability and Crime coverage for community associations offers:

 

  • A high-value coverage conversation with boards and property managers
  • Protection against frequent and costly claim scenarios
  • A solution tailored to well-run, lower-risk associations
  • Opportunities to round out association insurance programs

 

This is a practical, defensible placement that boards understand—and appreciate—once exposures are clearly explained.

 

Ready to Submit a Risk?

 

Getting started is easy, Begin the application today!

 

If you work with community associations and want a reliable Management Liability & Crime solution, this program is designed with your clients—and your agency—in mind.