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<br />#10634702v3 <br /> <br />16 <br />c. Fidelity bond or insurance coverage against dishonest acts on the part of <br />directors, officers, managers, trustees, employees or persons responsible for <br />handling funds belonging to or administered by the Association if deemed to be <br />advisable by the Board or required by the regulations of the FHA or FNMA as a <br />precondition to the purchase or financing of a mortgage on a Homesite. The <br />fidelity bond or insurance shall name the Association as the named insured and <br />shall, if required by the regulations of the FHA or FNMA as a precondition to <br />their insuring, purchasing or financing of a mortgage on a Homesite, be written <br />in an amount equal to the greater of (i) the estimated maximum of Association <br />funds, including reserves, in the custody of the Association or management agent <br />at any given time while the bond is in force, or (ii) a sum equal to three months <br />aggregate assessments on all Homesites plus reserves. An appropriate <br />endorsement to the policy to cover any persons who serve without compensation <br />shall be added if the policy would not otherwise cover volunteers, or a waiver of <br />defense based upon the exclusion of persons serving without compensation shall <br />be added. <br /> <br />d. Worker’s Compensation insurance as required by law. <br /> <br />e. Such other insurance as the Board may determine from time to time to be in the <br />best interests of the Association and the Owners. <br /> <br />10.2 Property Insurance for Homesites. Each Owner shall obtain and maintain the Owner’s <br />own property and liability insurance coverage relating to the ownership of the Owner’s <br />Homesite and any structures constructed thereon. <br /> <br />10.3 Premiums; Improvements; Deductibles. All premiums for insurance coverage <br />maintained by the Association shall be assessed and paid as a Common Expense. <br /> <br />10.4 Loss Payee; Insurance Trustee. All insurance coverage maintained by the Association <br />shall be written in the name of, and the proceeds thereof shall be payable to, the <br />Association (or a qualified insurance trustee selected by it). The Association, or any <br />insurance trustee selected by it, shall have exclusive authority to negotiate, settle and <br />collect upon any claims or losses under any insurance policy maintained by the <br />Association. <br /> <br />10.5 Waivers of Subrogation. All policies of insurance shall contain waivers of subrogation <br />by the insurer against the Association, or an Owner, members of the Owner’s household, <br />officers or directors, as applicable, and, if available, waivers of any defense based on co- <br />insurance or of invalidity from any acts of the insured. <br /> <br />10.6 Effect of Acts Not Within Association’s Control. All policies of insurance maintained <br />by the Association shall provide that the coverage shall not be voided by or conditioned <br />upon (i) any act or omission of an Owner or Eligible Mortgagee, unless acting within the <br />scope of authority on behalf of the Association, or (ii) any failure of the Association to <br />comply with any warranty or condition regarding any portion of the Property over which <br />the Association has no control. <br /> <br />SECTION 11 <br />354