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The HOA can have such a requirement, and they can pause the project to enforce it (normally by going to Court).
However, the HOA can only enforce this is if it in the bylaws or declaration. Meaning an email directive is not good enough (assuming that the bylaws/declaration do not give the HOA the authority to arbitrarily pick and choose which projects require insurance).
Ergo, provided that assumption is correct, the HOA cannot stop the project to demand the policy unless this is already written into the declaration or the bylaws.
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