Do You Need Workers Compensation Insurance for a Condo Maintenance Crew?

Assuming you are in the United States and are asking if a business requires worker’s compensation insurance for their employees, the answer is maybe.

Not that helpful, right?

It depends on what state the business is in and how many employees the business has. Some states require businesses to have worker’s compensation insurance, and some don’t, depending on the size of the business. 

So, how does this impact a homeowner’s association for a condo? Does an HOA have the same considerations as a registered business?

If condo maintenance is needed, you’ll want to consider who will do the work and whether that will mean you need insurance coverage. 

There are many considerations when considering worker’s compensation insurance for a condo association. Read on to learn more. 

What Is Worker’s Compensation Insurance?

Worker’s compensation insurance, commonly called worker’s comp, is an insurance program intended to protect workers while on the job. 

It provides protection for the worker if they become injured or ill while on the job. Worker’s compensation insurance covers:

• Disability insurance for workers
• Cash benefits
• Healthcare benefits
• Rehabilitative services
• Retraining if unable to return to the same job

Worker’s compensation makes sure a worker who is injured or becomes ill due to their work gets the medical attention needed. 

They don’t have to find themselves in a position where they can’t afford their own medical care. They also don’t have to face the possibility of their employer not covering the cost of the on-the-job illness or injury. 

From an employer’s perspective, a serious injury could be very costly. In fact, it could bankrupt a small business if they needed to cover the costs.

So, while the employer pays for the worker’s compensation insurance, they also protect their own interests too. 

Does Your Condo Association Need Workers’ Compensation Insurance?

You might be thinking, why would a Homeowner’s Association run by a Board of Directors need workers comp insurance? They aren’t a business in the traditional sense. 

Yet, the simple fact is that an HOA absolutely needs worker’s compensation insurance. There will be times when workers, either directly employed by the HOA or contracted by them, will work on the premises. 

If the association employs a direct employee, they are likely required by the laws of their state to have the worker’s comp insurance. 

If the association employs contractors to complete work, the contractor should be carrying insurance. But what happens if they aren’t? What happens if they carry their own insurance and that insurance, in turn, sues the HOA?

If you have people working on your property, you want to get the worker’s compensation insurance you need so your interests are protected. 

Why Does an HOA Need Worker’s Compensation Insurance?

When you consider your condo insurance needs, you want to include worker’s compensation as part of that package. 

The laws vary by state about whether you need coverage or not, and also what that insurance policy should look like. But in most states, even if you employ a single employee, you need worker’s compensation insurance. 

The issue arises for many HOA’s because they may not employ anyone directly. Instead, they hire a management company with employees or contractors to do work as needed. 

Nevertheless, an HOA can’t anticipate what kind of accident or even what type of liability the property might incur because of it. 

They also can’t guarantee that each time a contractor shows up to work on the premises that the contractor is up to date with their own insurance coverage. 

As a Board of Directors, you have the fiduciary responsibility to protect the property owners who are a part of the association, so they don’t also have to be tangled up in potential liability lawsuits. 

What Does Workers’ Compensation Insurance Cover?

You might better understand the importance of worker’s compensation insurance for condo association employees once you consider what it covers. 

Worker’s compensation insurance is intended to protect a worker if they’re injured or fall due to their work. Once a claim is made to the insurance company, their medical bills will be covered. 

Suppose hospitalization or rehabilitative care is needed following the injury, that would also be covered.  Prescriptions, therapies, and specialists that are part of the care are also covered. 

If the worker misses work due to their injury or illness, they can be paid lost wages. For more significant injuries where a worker could no longer perform the same type of job, worker’s compensation will also pay to retrain a worker for a new job. 

Why is all of this coverage so important? If the worker is injured on the property controlled by the HOA, the HOA could be held responsible for these costs if there wasn’t insurance in place. 

Is Workers Compensation Insurance for a Condo Maintenance Crew Worth the Investment?  

You likely wouldn’t be an adult if you didn’t bemoan the cost of an insurance bill from time to time. You always have to wonder if the cost of any insurance is worth it, that is until you actually need it. 

Then the cost of that insurance bill seems paltry in comparison to the enormous costs of being liable for an injury and paying medical costs for it. 

The cost of worker’s compensation insurance is relatively low compared to the costs an HOA would incur should someone be injured and there not be insurance in place. 

As an HOA Board of Directors, probably the better question is really can you afford not to have the worker’s comp insurance in place if there was an accident on your property?

How Do I Get Workers’ Compensation Insurance for My Condo Maintenance Crew?

You might be concerned that worker’s compensation insurance is more difficult to get than other types of insurance. This couldn’t be further from the truth. 

You can contact many condo association insurance companies who offer other types of insurance for condos. Most companies who offer other insurance like property insurance will also be able to write a policy for worker’s compensation too.

The insurer should be able to look at your unique needs and write a policy that will best fit your situation.

In some cases, the insurance company might be able to write a policy for worker’s compensation that covers non-employees. This is a non-traditional type of policy that protects the HOA if you have anyone who performs any type of duty for the association but still isn’t an employee.

When Would You Need a Worker’s Compensation Insurance Policy?

As a home owner’s association for condo owners you would want to secure worker’s compensation insurance anytime you have someone who is doing something on behalf of the association. 

You need worker’s compensation insurance for a number of situations.

Obviously, if you employ someone as a direct employee of the association or condominium complex, you need them insured. 

You may also be under contract with a management company that handles certain matters for the association. Any workers who the management company sends in, need coverage. It’s smart for the HOA to have coverage even if the management company also has it. 

If you contract with any vendors who come onto the property to work, you want the coverage. Even if you have owners who do work on behalf of the HOA, you want the coverage. 

What Are the Risks With Not Having Worker’s Compensation Insurance?

Are you wondering what risks you face if you opt to not secure this type of policy? You don’t have to worry about it assuming you can guarantee that no accidents or injuries will occur. This is, of course, impossible to do. 

Your risk happens when you hire a contractor and assume they have the necessary coverage. Even if they do have coverage, you can’t guarantee their insurance won’t come back to the HOA for liability should an injury occur. 

You also run a risk if you work with a management company that hires contractors. If they don’t ask to see a correct insurance certificate each time they perform work, the HOA is at risk.

It’s not uncommon for a contractor to get insurance and get the certificate of insurance, then not renew it.  This puts anyone who employs the person at risk.

Protect Your Condo Maintenance With Worker’s Comp Insurance

A workers comp policy for condos is an important protection for any homeowner’s association. A policy like this would protect your condo if the worst happened and a worker was injured while working on your behalf. 

You don’t want your condo association to run the risk of those potentially huge bills in the event of an injury. 

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