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Got Crime Insurance For Your Condo Association?

By: M Wyzanski

While a condo association may have a related business insurance policy for liability, property as well as directors' and officers' coverage, there is a glaring risk that many big and small associations might ignore - until the damages and losses present themselves. What I am referring to is crime insurance.

This type of coverage is essential because of the following general reasons:

• The typical small business incurs $120,000 losses annually in relation to employee stealing.

• On the whole, a fraud incident can go on for one or two years before being noticed.

• Ordinary property manager insurance does not cover losses that are due to Association theft incurred by an officer or employee.

• A community association must comply with governing documents that generally require coverage for all homeowners.

Okay, you say. Crime Insurance is a good thing if you are required to get it and if you actually experience an in-house theft, but is it really so terrible to be without it if the odds are for you?

The insurance companies nod yes - quite emphatically. "Yes, yes, yes," is the resounding answer to something that appears rhetoric.

To underscore the enthusiasm for this type of policy, take a good look at some claim examples involving crime and a condo association.

Crime Insurance Claims that could happen to your Condo or Community Association

Theft of Money

Although he was on in years, it appeared as if the treasurer of a senior citizen community association had not yet learned the value of ethical behavior. He embezzled the residents out of approximately $30,000 by using public association money for his personal needs.

General Theft

The treasurer of a particular association leased a personal car and other items for himself by opening a commercial credit card and having the purchases billed to the association. It was only after a couple of years that another association member smelled trouble and caught on to the illegal goings on.


When the summer and balmy weather came to an end, that should have been the end of the pool management's tenure at a condo association. As far as payroll went it wasn't. Although there were no services provided, the treasurer kept up 'payments' by forging other officers' signatures while using the money for his own personal purchases. A new officer finally uncovered this criminal's activities after much damage was done.

Property Manger Theft of Vault

A property manager employee became awfully disgruntled following an argument about salary. In the dead of night, he accessed the place where the vault was located and vandalized the room while stealing money and important documents from the vault. Because there was no crime insurance in place, the association was left 'holding the bag' of responsibility.

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