Which statement about fidelity coverage is false?

• A. The association should have its own fidelity coverage independent of the management company's policy.
• B. The management company should also be covered under the association's policy.
• C. Fidelity coverage should include unpaid volunteers.
• D. The management company's policy alone is sufficient for all covered parties.

Answer: (D)

Fidelity coverage protects the association against losses from dishonest acts by anyone who handles funds for the community—board members, management company staff, and even unpaid volunteers. Because money moves through multiple hands, the association should carry its own fidelity insurance to ensure losses are covered regardless of any single party’s policy. It’s also important that the management company is included under the association’s policy so their personnel are protected, and that unpaid volunteers who may handle funds are named as insured as well. Relying on the management company’s policy alone creates gaps—coverage might not extend to the association’s funds in every situation, and volunteers or the board could be left without protection. Therefore, the statement that the management company’s policy alone is sufficient is not correct.