Community associations may not be run exactly the same as traditional businesses, but like ordinary businesses, they do have a financial component to their operations. Since money is a part of any business, and HOAs for that matter, there is always a level of risk that needs to be worked with as well as the reality of dealing with financial losses of some kind.
Associations can protect their losses by making sure their commercial policies have the right crime insurance attached to them including portions of money and security coverage. Losses related to funds that are off premises and in transit can also be covered in crime insurance. Associations should check their policies to look to see how money and securities are valued, and as insurance agents, we suggest that you encourage your association clients to include this specific type of coverage in their overall programs.
The Importance of Money and Security Coverage
This kind of protection is meant to provide the right financial safeguard against physical theft. When a burglar steals money from a safe, money and security coverage kicks in to provide for the loss. This same kind of protection can be installed in crime insurance for community associations.
Typically, fraud and theft in community associations occur when it comes to internal matters, such as a treasurer or board member gaining access to information or funds and essentially stealing from the inside. But money and security coverage can help protect against the physical theft of property by an outside source, such as a burglar or someone in the community. And while it’s always important to stay on top of having the right coverage against data theft and cybersecurity issues, which are gaining relevance in HOAs, it’s still necessary to protect against the physical theft of money.
The Role of a Fluctuating Money Market
If you have kept your eye on the financial market as of late, you may have noticed there has been a lot of ups and downs when it comes to stocks, bonds and the overall outlook on the dollar. The values of money and security coverage within crime insurance can move up and down. It’s important that HOA leaders discuss claims with a crime insurance professional who can lay out coverage and risks in specifics.
For securities, insurance companies typically pay the value of the securities at the close of business on the day a loss is discovered. Insurance companies may also be on the line and have the option of settling the securities claim by paying the value of the securities or by replacing them in kind.
About Kevin Davis Insurance Services
For over 35 years, Kevin Davis Insurance Services has built an impressive reputation as a strong wholesale broker offering insurance products for the community association industry. Our president Kevin Davis and his team take pride in offering committed services to the community association market and providing them with unparalleled access to high-quality coverage, competitive premiums, superior markets, and detailed customer service. To learn more about the coverage we offer, contact us toll-free at (877) 807-8708 to speak with one of our representatives.