If your HOA is under the impression that you don’t need work comp insurance because you don’t have anyone on payroll, think again! Just because you don’t have any official employees, you likely have volunteers and occasional contractors that could be deemed employees.
Is your association at risk?
Do your property manager and association require all contractors to provide proof of license and insurance when bidding for jobs? The line is getting blurred on what really constitutes an independent contractor.
Are you and your property manager hiring only licensed and insured contractors for all jobs (no matter how small?)
Can you be absolutely sure that your pre-approved contractor has not allowed a lapse in license or insurance coverage at any time during and up to the completion of the work?
Do you have volunteers sign waivers of liability for their services provided?
If you answered no to any of the above you may not have the systems needed to fully protect your association!
It is not uncommon for associations to hire unlicensed and uninsured contractors to perform activities such as landscaping, gardening, and very incidental repairs. If a vendor is uninsured at the time he is performing services at your premises you become the de facto employer for that vendor and his employees. If he or any of his employees get injured while working at your association you are now responsible for paying for those injuries. There are only two ways to eliminate this exposure: 1. Make sure that your vendors are licensed and insured as of the day they walk on to your premises. 2. Purchase workers compensation insurance, like every other employer in the state. If you choose not to buy coverage, and you do not aggressively check for insurance, you are accepting a possible expense that can be hundreds of thousands dollars, when a vendor’s employee gets hurt at your association.
Brown & Brown has been insuring Homeowners associations for decades. We cover dozens of Bay Area associations and thousands nationally. If you have any questions about workers’ compensation insurance for your HOA or anything else, please contact us!