Insurance May Cover Corrupt Acts
By DENNIS HEVESI / November 7, 2004
There is some good news for cooperatives and condo-miniums that feel they have suffered because of the alleged bribery, extortion, kickbacks and other corrupt acts of some real estate managers and management companies. Insurance may cover the losses imposed upon them, but only if they act quickly and with discretion.
Flying into court may be the wrong way to resolve insurance coverage matters. Instead, boards should work with brokers, agents, and insurance companies to extend the period of time during which recovery suits can be brought. Then, give notice and sit back and consider whether pursuing insurance is the right course of action.
Review Your Coverage
Most co-ops and condos carry crime insurance or fidelity bonds to cover losses resulting from dishonesty by employees and agents. This coverage is, for the most part, broad enough to encompass dishonesty by real estate agents and management companies. However, an immediate and thorough review of all possibly applicable insurance policies is vital.