Community associations have unique insurance needs since they function as not-for-profit entities. One common question for HOA board members is whether the association needs workers’ comp insurance. This is a particularly difficult question for HOAs that do not have employees, such as those that only have volunteer board members with an external management company. The answer, however, is yes, all HOAs need workers’ comp insurance.
The reason is twofold. One is that HOAs work frequently with vendors. In the case of workers’ comp, it does not matter whether the vendors are hired directly by the board or by the management company—the same problem will result if a vendor’s employee is injured. Too many HOAs assume that the vendor would be the only one held responsible for their own injured employee, but the law still allows the employee to sue the HOA. This is particularly likely if the vendor company did not have the proper workers’ comp insurance in place, leaving the employee nowhere else to turn. Even in cases where the HOA did its due diligence and required the vendor to prove its insurance status, this can end up problematic if the vendor allows the insurance to lapse or if they provided falsified information to begin with.
Too often, community associations skip these steps to save time or money. They may overlook the lack of licensing and insurance to find a cheaper vendor. Other times, they may assume it is not necessary for small jobs, like painting a door or weeding a common area. This is a dangerous mistake, but at least having workers’ comp in place could help cover the costs of these common situations.
The second reason community associations must have workers’ comp insurance is for volunteers. In this case, the association needs to work with a specialist in HOA policies to ensure volunteers, and board members in particular, are covered under workers’ comp. Otherwise, in most cases, workers’ comp only covers paid employees.
A possible scenario here would involve a board member becoming injured while committing a board duty, such as driving to file paperwork with the city. Other times, a regular, non-board volunteer may file under workers’ comp if they are injured during their monthly clean-up efforts.
Thus it is the case that even though most community associations do not have paid workers, they still must have workers’ comp to protect their assets.
About Kevin Davis Insurance Services
For over 35 years, Kevin Davis Insurance Services has built an impressive reputation as a strong wholesale broker offering insurance products for the community association industry. Our President Kevin Davis and his team take pride in offering committed services to the community association market and providing them with unparalleled access to high-quality coverage, competitive premiums, superior markets, and detailed customer service. To learn more about the coverage we offer, contact us toll-free at (877) 807-8708 to speak with one of our representatives.