Happy New Year!  Wow did 2018 just fly by or what?  Well, it is that time again to set our resolutions for the new year.  We have been doing this for a few years now, so how do these look?  Any ideas for additional resolutions?

1. Double check your fidelity bond/crime coverage – and we aren’t just talking about the limit!  New legislation went into effect on January 1 which requires fidelity (also called crime or employee dishonesty) limits to be at least equal to 3 months of assessments plus the amount in reserves.  Additionally, it must include coverage for computer fraud and funds transfer fraud.  If the association uses a managing agent or management company, the coverage shall additionally include dishonest acts by that person or entity and its employees.  You may need to check in with the agent for your association to be certain all this is included in your policy.  (If your policy is with Berg Insurance, don’t worry – it is all included!)
2. Check the status and contact information for the association with the Secretary of State –Visit https://businesssearch.sos.ca.gov/ and type in the legal name of the association.  Be sure that the “agent for service of process” lists the correct contact information for the association.  Remember that street in San Francisco that was sold because the HOA never paid their taxes?  The contact information was incorrect, which is why they were not notified of the impending sale. 
   As for the status, if it shows “active” you are good to go!  If it shows anything else, you could have trouble.  Associations that are not active (for example “suspended” or “forfeited”) could have difficulty in filing insurance claims or even getting insurance coverage, not to mention lose their name entirely.
3. Take Inventory – Take photos and have a list of all the “little things” the association owns but are not necessarily listed in the reserve study.  Clubhouse kitchen supplies and art on clubhouse walls are two examples.  Turn this into an annual exercise.
4. Have a policy for who pays the deductible – Not only is this in the best interest of the association, it helps the homeowners.  If there is a clear policy in place, most HO-6 carriers will provide coverage if the individual homeowner is responsible for the deductible on the HOA’s master policy.
5. Collect “additional insured” endorsements from service providers– We are talking about the actual endorsement page, not just a mention on the certificate of insurance.Make this another thing you do annually.

Terri Guest, CIRMS, CMCA is the Northern California Sales & Marketing Representative for Berg Insurance Agency and can be reached at Terri@berginsurance.com. Have an insurance question? Ask Terri and your question may be the subject of next month’s edition of Coverage Corner! If your question is picked, you will win a gift card!