Three simple options
CIG Takes Care of Your Workman's Compensation for Your HOA
We hear it all the time, “We don’t have any employees so we don’t need workers’ compensation insurance”. Nothing could be further from the truth because residential associations can and have been held responsible for medical expenses and lost wages when uninsured contractors are injured while working on an association property.
Why Homeowners Associations should have this:
Any HOA who hires General or Artisan Contractors to do repairs in a community should have this. In most cases, that would apply to all HOA Community’s. An association board of directors (BOD) has a fiduciary responsibility to protect the homeowners association from uninsured contractors. The BOD should always make sure a contractor carries general liability and workers’ compensation insurance policies before allowing the contractor to do any work on the association’s property. The BOD protects the association by securing a certificate of insurance from the contractor showing the required coverages are in place prior to allowing the contractor to do any work at all.
- A current resident owner in the community, who is a contractor, performs some work for the community or another owner within the community. If the contractor and any of his sub-contractors get hurt on the job, the HOA would be considered the employer, making the association responsible for the workers’ compensation benefits.
- Workers’ Compensation is a major expense for most Contractors. Some contractors will show evidence of insurance to get a job but then cancel or non-renew to save money. This does happen and you are not required to be notified by the insurance company. This can create a large liability for an association if an employee of the contractor is injured.
- The Manager of your HOA hires an unlicensed contractor who is also uninsured. An Injury occurs. It is possible that a Judge or Jury could rule that the association has joint liability with the associations property manager for workers compensation benefits to the employee injured.
What type of policy does a Homeowners Association purchase?
With all the impactful financial exposure to your association, why would any association take a chance here.
HOAs can simply carry a “minimum premium” or a “if any” workers compensation policy to protect this exposure. This policy typically is less than $700 a year.
We strongly recommend that all homeowners associations insure with this policy. It is a small premium to pay for the peace of mind it provides.
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HOA Workers’ compensation questions? Talk to one of our agents to find a policy that works for you.