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In an effort to keep costs of the association low, many Boards decide to opt out of worker’s compensation in their insurance plans. Like many, the assumption would be that the association really has no employees, so what is the harm in bypassing this type of coverage in a policy. This could not be further from the truth! It may not seem like this coverage is something you need, but it truly is a necessary piece of your policy.

Below are examples of the types of people that may need coverage:

  • HOA Employees – Like any business, your HOA may have employees, and they are direct employees of the HOA. And as employees, they are legally required to be covered with workers’ compensation insurance. Similarly, because your employees are working for your association, you need to have them covered under workers’ compensation to protect you if an injury occurs while on they are doing business for your association.
  • Full-Time Contracted Employees – There are some HOAs that require full-time workers, but they choose not to directly hire an employee. Instead, they contract with a different company and use their employees. These full-time contracted employees work a regular schedule. But, they aren’t technically employees of the HOA, so does your association need to worry about workers’ compensation? Of course! Most likely, the contractor also has a workers’ comp policy, and you should verify this, but it’s also a good idea to have your own in place, in case their policy lapses, or you are somehow found responsible.
  • Other Contracted Employees – Your HOA may also need to occasionally hire contractors for one-time work or other projects. As an example, the clubhouse may need repairs, so you hire a contractor to fix it. These contractors only come for a short time, then move on to the next job. You will want to verify they have workers’ compensation through their own employer, but it is also a good idea to have coverage them protects them yourself. It’s always better to be safe, especially when dealing with potential injuries that could fall on the HOA.

A worker’s compensation policy not only covers injury to paid employees of the association, but can also cover losses for any non-compensated volunteers of the association, like Board or committee members. It will also pay benefits to the spouse and/or dependent children of that volunteer in the event that there should be a death or long term disability caused while the volunteer was working on behalf of the association. When shopping for a new policy, or renewing an existing one, it is always best to include worker’s compensation as part of it. With all that said, is your HOA covered?