Fidelity insurance in a community association primarily covers:

Fidelity insurance in a community association primarily covers:

• A. Property damage from natural disasters.
• B. Employee dishonesty that could lead to theft of funds or assets.
• C. Cybersecurity breaches of online banking.
• D. Liability for injuries on the condo premises.

Answer: (B)

Fidelity insurance focuses on losses from dishonest acts by people who handle the association’s funds or assets. For a community association, the main risk is internal theft or embezzlement by staff, managers, or volunteers, such as stealing cash, forging checks, or making fraudulent transfers. This coverage steps in to reimburse the association for those losses up to the policy limits, helping protect the HOA or condo corporation’s finances. Other types of losses—like property damage from natural disasters, injuries on the premises, or external cyber breaches—are covered under different policies (property, liability, or separate cyber/crime endorsements), not the primary purpose of fidelity insurance. So the essence of fidelity coverage is safeguarding against internal dishonesty that could drain funds or assets.

Fidelity insurance focuses on losses from dishonest acts by people who handle the association’s funds or assets. For a community association, the main risk is internal theft or embezzlement by staff, managers, or volunteers, such as stealing cash, forging checks, or making fraudulent transfers. This coverage steps in to reimburse the association for those losses up to the policy limits, helping protect the HOA or condo corporation’s finances. Other types of losses—like property damage from natural disasters, injuries on the premises, or external cyber breaches—are covered under different policies (property, liability, or separate cyber/crime endorsements), not the primary purpose of fidelity insurance. So the essence of fidelity coverage is safeguarding against internal dishonesty that could drain funds or assets.