Association property, general liability, board directors and officers coverage, and the fidelity bond — plus the one question that causes more disputes than everything else combined.
A homeowners or condominium association in North Carolina typically needs property coverage on the common elements, general liability, directors and officers liability for the board, a fidelity or crime bond covering anyone who handles association funds, and workers' compensation if the association has employees. For condominium associations, the single most consequential question is whether the declaration requires the association to insure the units bare-walls or walls-in — and a surprising number of associations do not know which one they are.
Common elements — clubhouse, pool, gates, signage, mailboxes, roads, and for condominiums, some or all of the buildings depending on the declaration.
Slip and fall in common areas, pool and playground liability, and injury on association-maintained grounds.
Protects board members personally against claims arising from board decisions — assessments, architectural denials, rule enforcement, elections. The most misunderstood coverage in the class and the one boards most need.
Covers theft of association funds by a board member, employee, or management company. North Carolina's Planned Community Act and Condominium Act address fidelity coverage — and lenders generally require it.
Required if the association employs anyone. Also protects against claims from volunteers and uninsured vendors in some states.
Common requirement in lending and management agreements, and inexpensive relative to the exposure.
For a condominium association, the declaration — not the insurance policy — determines where association responsibility ends and unit owner responsibility begins. There are three common arrangements:
Nearly every serious coverage dispute in a condominium arises from a mismatch here: the declaration says one thing, the association's policy is written another way, and unit owners' HO-6 policies were bought on a third assumption. After a water loss, three parties each believe someone else is paying for the drywall.
What to do about it. Pull the declaration and the bylaws, find the insurance article, and have the association's policy written to match it. Then tell the unit owners in writing what they are responsible for, so they can buy the right HO-6 with adequate loss assessment coverage. This takes an afternoon and prevents years of argument.
Board members are volunteers making decisions that affect their neighbors' money and property. That combination generates claims: a homeowner sued over a denied architectural request, a challenge to a special assessment, an allegation of selective rule enforcement, a disputed election, a claim of failure to maintain reserves.
D&O coverage responds to these, and the details matter more than the limit. Things to check on an association D&O form:
Associations hold real money — operating accounts, reserve funds, sometimes hundreds of thousands of dollars — and it is often handled by a volunteer treasurer or an outside management company. A fidelity or crime bond covers theft of those funds.
Two practical points. First, the bond limit should reflect the maximum amount of funds under association control at any point in the year, not the average — reserves peak after assessments. Second, if a management company handles your funds, confirm whether your bond extends to their employees or whether you are relying on theirs. Boards frequently assume the latter without checking, and management agreements vary.
North Carolina addresses fidelity coverage for associations in the Planned Community Act and the Condominium Act, and mortgage lenders commonly require it for units to be financeable. This is worth reviewing against your governing documents.
Licensed in five states. We write this coverage across North and South Carolina — our primary markets — as well as Tennessee, Virginia, and Florida.