Crime Insurance for a Co-ownership Syndicate: Practical Guide

Protecting the syndicate’s money is about more than building insurance and liability coverage. Crime insurance (often called “fidelity insurance”) covers financial losses caused by theft, misappropriation, fraud or forgery committed by someone with access to the funds. For a divided co-ownership syndicate, it is a practical safeguard against scenarios that can seriously hurt the budget, common expenses and co-owners’ confidence (current as of 2026-07-18). For SEO clarity, we also use the expression “crime insurance co-ownership syndicate.”

What is crime insurance in a co-ownership?

Crime insurance is financial protection that indemnifies the syndicate in the event of a loss of money, securities or financial instruments resulting from dishonest acts. It is intended in particular to cover theft by a director, employee, concierge, external condominium manager or third party who handles the syndicate’s payment methods. Depending on the policy, it may also cover computer fraud (e.g., a falsified transfer) and cheque forgery.

In practical terms, it complements the condo’s other insurance coverage. Building insurance (property insurance) covers material damage; liability insurance or directors and officers (D&O) insurance protects against claims for management errors. Crime insurance, for its part, addresses the shortfall when someone misappropriates or steals funds. Several declarations of co-ownership already require proof of fidelity insurance for the condominium manager and, sometimes, for the board of directors.

From a legal perspective, the syndicate is a legal person (see section 1039 of the Civil Code of Quebec) that must insure the building and its liability under the Civil Code of Quebec (see section 1073 of the Civil Code of Quebec). Even though crime insurance is not expressly required by law, directors’ prudence and diligence (see sections 321–322 of the Civil Code of Quebec) support obtaining this coverage, especially when annual collections and the contingency fund are substantial.

Why should your syndicate obtain it?

• The risks are real. In real life, losses occur through repeated small amounts (invented refunds, duplicated expenses) or through a single major incident (fraudulent transfer). A delay in detection can significantly increase the total lost.
• The budgetary impacts are serious. An uninsured loss must be offset by an increase in common expenses, a special assessment or a reduction in services. Co-owners’ confidence in the board of directors and the condominium manager also suffers.
• Internal controls have limits. Separating duties and requiring two-signature approvals reduce the risk, but do not eliminate it. Crime insurance acts as a safety net.
• Lenders and some insurers recommend it. During a refinancing or an insurance call for tenders, it is common to request proof of fidelity coverage.

Typical claim examples:

• Forgery of cheques payable to a fictitious supplier.
• Unauthorized bank transfer following a “spoofing” email impersonating the board president.
• Reimbursement of fictitious expenses approved with false supporting documents.
• Cashing of a common-expense cheque misappropriated by an internal person.

Legal framework, declaration of co-ownership and board responsibilities

The board of directors administers the syndicate’s funds with prudence, diligence, honesty and loyalty (see sections 321–322 of the Civil Code of Quebec). The syndicate, as a legal person (see section 1039 of the Civil Code of Quebec), must also insure the building and its liability (see section 1073 of the Civil Code of Quebec). Although the law does not name crime insurance, sound governance practices and, often, the declaration of co-ownership require financial protection measures.

Points to check in your documents:

• Declaration of co-ownership and by-laws of the immovable: requirement for fidelity insurance for the condominium manager, the board of directors, bank signatories and people who handle funds.
• Management mandate: the condominium manager’s responsibilities, approval thresholds, obligation to be insured and obligation to add the syndicate as an additional insured.
• Annual general meeting resolutions and minutes: coverage limits, annual updates, and presentation of insurance certificates to co-owners.

When a claim occurs, the board of directors must act quickly: preserve the evidence, notify the insurer, file a police complaint if necessary and call a meeting (or special meeting) to manage communications with co-owners. Transparent follow-up in the minutes protects the syndicate’s credibility.

Limits, clauses and exclusions to watch

Choosing a policy is not limited to the overall amount. Several clauses affect indemnification and the board of directors’ obligations.

Limits, sublimits and deductible

• Overall limit: often established based on annual collections (common expenses) and combined bank balances (operations + projects + contingency fund).
• Sublimits: computer fraud, forgery, fund transfers through social engineering, theft outside the premises (e.g., a deposit in transit).
• Deductible: the portion not indemnified by the insurer; plan how to absorb it in the budget. Note: the allocation of a deductible is seen mainly in property and liability insurance (see section 1074.1 of the Civil Code of Quebec for the allocation of certain deductibles), but the budgeting approach may inform your practice.

Additional insureds and external condominium manager

• Name as insureds: the syndicate, its directors, employees, volunteers and anyone who handles funds.
• Condominium manager: require its own fidelity insurance and require that the syndicate be added as a beneficiary or additional insured, in addition to a waiver of subrogation against the syndicate, where appropriate.
• Discovery after employment ends: check the discovery period (ten years versus a few years) and the effect of a change of condominium manager.

Common exclusions

• Acts by directors that were not discovered within the required period (discovery limit).
• Indirect loss, fines and bank penalties.
• Fraud committed by people who are not considered “employees” under the policy’s definition.

Implementation tip: record, in an internal policy adopted by the board of directors, the approval thresholds, signing responsibilities and the condominium manager’s insurance obligations. Attach this policy to the notice of meeting for the annual general meeting for information purposes and validate it in the minutes.

Internal controls that complement insurance

A good policy is never an excuse for weak controls. The best results come from a two-part approach: prevention + risk transfer.

Controls to put in place now:

• Mandatory dual signatures for any payment above a defined threshold; digitization of approvals with an audit trail.
• Separation of duties: one person prepares, one person approves and one person reconciles.
• Monthly bank reconciliations reviewed by a non-signing director; confirmation of payments against the approved budget.
• Supplier validation: list approved by the board of directors, contact information verified, and a policy for changing banking information that includes a call to the official telephone number.
• Restricted access to online banking platforms with multi-factor authentication; logging and alerts.
• Quarterly report to the board of directors on collections, expenses and the status of the contingency fund; presentation at the annual general meeting and distribution to co-owners through the portal.

For day-to-day management and financial follow-up, see our financial and administrative management services: multiRent services.

Claims, communication and impacts on common expenses

If you suspect a problem, act quickly and document everything.

Recommended steps:

1. Freeze access and secure the evidence (statements, files, emails, bank logs).
2. Notify the insurer in accordance with the policy; comply with reporting deadlines and required forms.
3. Review the obligation to file a police complaint; open a file if necessary, as this is often required by the insurer.
4. Hold a board of directors meeting; if necessary, appoint an accountant to conduct a forensic analysis.
5. Inform co-owners matter-of-factly: known facts, measures taken and next steps. Record the decisions in the minutes.

Financial impact:

• Deductible and uninsured losses: these must be absorbed in the budget; an adjustment to common expenses may be required.
• Recoveries: if the insurer provides indemnification or money is recovered from a third party, this reduces the net impact on the budget.
• Communication with buyers: the syndicate’s certificate and annual financial statements must reflect the situation; transparency and proper documentation help avoid disputes during a condo sale.

Useful resources and legal references:

• Co-ownership syndicate as a legal person: section 1039 of the Civil Code of Quebec on LegisQuébec.
• Building insurance by the syndicate: section 1073 of the Civil Code of Quebec, see LegisQuébec.
• Directors’ duties (prudence, loyalty): sections 321–322 of the Civil Code of Quebec, on LegisQuébec.
• Good practices in co-ownership: guides and articles from the RGCQ.

FAQ about crime insurance for a syndicate

• Is it mandatory? No. The law does not specifically require crime insurance. However, your declaration of co-ownership, by-laws of the immovable or management mandate may require it. Many syndicates obtain it as a precaution, given the board of directors’ duties of diligence.
• Crime insurance versus D&O insurance (directors and officers)? D&O insurance protects against claims alleging a management error (e.g., a poor decision or omission). Crime insurance, for its part, indemnifies the loss of money caused by a dishonest act (theft, fraud, misappropriation). The two types of coverage complement each other.
• What amount should you choose? Set it based on annual collections (common expenses), combined balances (including the contingency fund) and the condominium manager’s access. Provide sublimits for computer fraud and fund transfers. A broker can help you model your exposure.
• What should you communicate to co-owners? At a minimum: confirmation of coverage, limits and deductible, presentation at the annual general meeting and an annual update. Keep the evidence on file and record the decisions in the minutes.
• What should you do if the fraud involves a board member? Apply your conflict-of-interest policy. Remove the person’s access, call an emergency meeting, notify the insurer and follow the claims procedure. Document each step.

This article provides general information and does not constitute legal advice. Consult a lawyer or notary for your situation.

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