CAI-NJ November 2025

FRAUDULENT ACTIVITY... from page 30.

their primary bank, but also any secondary bank that may provide the service. Are they providing payment options for homeowners to ensure that you have an option with which you are most comfortable? Important Insurance Basics to Know: • Fidelity/Crime is a First Party Coverage (not a liability policy) • Exposure is loss of the Insured’s money, securities, and/ or other property • Fidelity (theft by employees) • Crime (theft by non-employees) • The definition of “employee.” In the normal course, will include actual employees, Directors & Officers, and community association managers Types of Community Association Fidelity/ Crime Coverage: • Employee Theft • Forgery and Alteration • Inside the Premises: Theft of Money, Securities, Robbery & Safe Burglary • Outside the Premises • Computer Fraud • Funds Transfer Fraud • Social Engineering and False Pretense The bottom line is that associations need to do every thing they can to protect themselves with the industry evolv ing. It is important to stay on top of coverage trends, tech nology changes and how you are exposed. Associations are being looked at as having deep pockets and there has been a huge uprise in our industry regarding claims. It is important to know that you may follow all the right procedures but can still be exposed if one of your vendors are hacked. Create a plan in the event you do suffer a loss and know how to execute. Remember, educate yourself, work with industry specific business partners and trust your professionals to do their job! n

als, learn from them and take the time to educate your selves. Knowing the best ways to mitigate risk can prevent the association from future claims. Ask questions! Does your management company work with a bank or insurance professional that has specializa tion in community associations? What types of procedures and risk mitigation tools can you implement? Are there resources and education available to you?

“...associations need to do everything they can to protect themselves with the industry evolving.”

A Managers Role: A manager assists with expenses, projects, and the day to-day transactions of the associations that they manage. It is important to follow best practices such as contacting their business partners to make sure that they have received those payments previously sent or call if you receive some thing suspicious. It’s not the dollar amount on the check that is dangerous in the wrong hands, it’s the check itself. Utilize a fraud prevention checklist and create uniform procedures for everyone to follow. A Management Company’s Role: One of the key responsibilities of management is working with a financial institution that understands how community associations function. It is key that they know their associ ations and the way that the management company is set up. They should be utilizing Positive Pay with not only

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NOVEMBER 2025