Crime Insurance and D&O Insurance Required in FL?

Hi Crystal,

In Florida, Directors and Officers (D&O) insurance and crime/fidelity coverage for homeowners associations are not explicitly required by state law, but they are strongly recommended. Florida Statutes Section 720.3033(5), though, states that an HOA shall obtain a fidelity bond but may waive this requirement through a vote. This section states:

“(5) The association shall maintain insurance or a fidelity bond for all persons who control or disburse funds of the association. The insurance policy or fidelity bond must cover the maximum funds that will be in the custody of the association or its management agent at any one time. As used in this subsection, the term “persons who control or disburse funds of the association” includes, but is not limited to, persons authorized to sign checks on behalf of the association, and the president, secretary, and treasurer of the association. The association shall bear the cost of any insurance or bond. If annually approved by a majority of the voting interests present at a properly called meeting of the association, an association may waive the requirement of obtaining an insurance policy or fidelity bond for all persons who control or disburse funds of the association.”

While D&O insurance is optional, it is a best practice for HOAs to have it to mitigate legal risks. Crime/fidelity coverage, however, is required under Florida law to ensure financial protection for the association.