If your HOA has opted out of workers’ compensation insurance as a cost-saving measure because you don’t have any employees and think you don’t need this coverage, you may want to reconsider.
By law, all employers are required to carry workers’ compensation insurance. Workers’ compensation insurance provides coverage for injuries to association employees and volunteers (directors, officers and committee members) that occur on the association’s premises, no matter who is at fault. If the illness or injury is job-related, the injured person receives medical care, disability payments and job retraining, if required. In exchange, the injured person cannot sue the employer.
If your association has no employees and the property management company hires the people who work on your premises, they would be responsible for making sure the vendors are licensed and insured. But are you sure that they require all contractors to provide proof of license and insurance when bidding for jobs? Are you sure that they hire only licensed and insured contractors for every job, small or large? If you have no way to monitor this, you may be exposing your association to potentially expensive medical costs when a worker on your premises is injured but is not, in fact, covered by his/her employer.
Associations occasionally hire unlicensed and uninsured contractors for landscaping, gardening and similar activities. If the contractor is uninsured when performing services on your premises, your association is considered to be his/her employer. If an injury occurs to the contractor or his/her employees while working for you, the association will be held responsible for paying potentially hundreds of thousands of dollars for the injuries. The only ways to avoid this exposure are to require evidence that your vendor is licensed and insured on the day they start work, or purchase workers’ compensation insurance.
Consider also that your board members and committee members who have volunteered to serve on the board would be excluded from coverage in the event of injury because they are not considered “employees” under the Labor Code §3352(i) definition. Some carriers will permit endorsements to include the board of directors, officers and committee members under the association’s workers’ compensation policy. If you have this coverage, your board members can be covered for injuries that occur when acting in an official capacity on behalf of the association.
We specialize in all forms of insurance for common interest developments and will work hand-in-hand with your board to make sure you have the broadest coverage possible.