Workers Compensation Insurance for Homeowner Associations

Workers compensation insurance provides coverage to workers who are injured on a job; it prevents the situation where a worker has to sue his/her employer to recover costs associated with a work-related injury. So why would a homeowner's association need worker compensation insurance: an association typically does not have employees and the service providers used are required to provide a certificate of insurance? While this may be true consider this: 1) most CC&R documents state that an association should have workers compensation coverage; and, 2) a certificate of insurance can provide a false sense of security as the service provide may have given you a certificate months ago yet allowed their policy to lapse recently due to non-payment of premium. Particularly during difficult economic times the later can occur frequently as service providers such as pest control, roofers and painters can face premiums that are on the higher end of the rate range to begin with.

Not only does the coverage serve as a back-up against unknowingly using an uninsured service provider; board members and authorized volunteers performing duties on behalf of the association can also be covered. There are situations where board members tasked to complete monthly safety/complex inspections sustain an injury while carrying out these duties. Most of the time these minor injuries are not a big deal and never get reported; once in awhile they are turned into a "Federal" case.

Your association master insurance policy does not contain workers compensation coverage as a standard feature; it is an optional coverage. Board members would be prudent to have this optional coverage; the cost ranges from $550 to $1,000 per year. Anticipating potential problems before they happen is always a good policy.