HOA Insurance Implications of CA Senate Bill 323

Hi Everyone,

My name is Kevin Boland and welcome to my insurance website. I started to get a lot of emails in January 2020 and this month from Association Managers asking about their HOA insurance, specifically if Farmers Insurance will defend the new Inspector of Elections under the new California Senate Bill SB323. The answer is Yes we will. I got a definitive answer from them. We can defend that inspector if three criteria are met:

  1. The board appoints the volunteer to be an inspector of elections and it’s documented in the minutes.  I know that all Managers have a PHD when it comes to good documentation.
  2. That person receives no compensation.
  3. And most important of all, that person is a member of the association, in other words they are a home owner because, in our definition under our Directors & Officers insurance, an “appointed volunteer” is an Insured.

So the answer is Yes they will, but here is a question. “Do we really want to have a home owner be an inspector of elections?” Because the whole idea and spirit behind the Davis Stirling new laws is to make it an impartial process so that if an angry home owner were to sue the board and claim, “election fraud”. we want to be able to demonstrate clearly that there was no fraud; that there was an independent inspector of elections. 

So my professional opinion is hire a CPA firm to do it for you. They are known to be reputable. And that CPA firm can have no prior contractual relationship with that association of course under the new laws, but if you hire a local CPA firm and even a law firm to do the counting for you, you have a professional organization for you to do the work. And remember, the new inspector of elections has to count the ballots, keep the ballots, keep the signed and sealed envelopes in which the ballots arrived, keep the proxies, keep the voter list and keep the registered candidate list. So don’t we want a professional organization that is going to be dependable to do that compared to an individual home owner who might move out of the area. 

So I think it’s important to consider that fact, and that’s all I want to say about this subject this year.