What types of insurance do you need?

There are several types of insurance coverage that your homeowners association should carry. If you maintain this coverage your Association should be protected from almost all issues that arise. Let's take a look at the coverage:

Property insurance

If your HOA owns property then it should protect it. This type of coverage does just what is says; insures the property. This policy will cover against vandalism, theft and damage from fires, storms and natural disasters.

Liability insurance

This will cover things like accidents or injuries that take place on the property. Your HOA could be liable for actions it took, or did not take. Associations should take actions to correct any safety issues, especially in today's world where lawsuits are all too common.  

Directors and officers liability insurance

This is more commonly known as "D&O" coverage. This protects officers and trustees from being held liable when performing their duties for the Association. The D&O policy helps fund this requirement. It protects officers and trustees when they err accidentally and without malice. It does not cover willful acts of wrongdoing.


Associations must obtain a Fidelity Bond/Crime and Fidelity Insurance, but there is no minimum coverage amount.  It can also be waived by a majority vote at an annual or special meeting of the members.