Real Estate & Property Law

HOAs and Workers Compensation Insurance

Some confusion has apparently arisen about worker's compensation insurance and requirements under the law. I have written articles about the good and common sense rationale of having it, even if an HOA does not have employees per se, because it adds protection for HOAs and managers who might be caught in a position of having hired a contractor, having received proof of insurance, and having found out that the insurance either expired or was never purchased. This quote was sent to me and an HOA person asked if it was true that worker's compensation insurance was required for an HOA.

The quote as it apparently appeared in some communication:

"Recent decisions from the State Workers Compensation Appeals Court now leaves HOA?s and their management company?s both jointly liable should any person performing any labor for an HOA be injured and found to not have their own workers compensation coverage. This decision forces HOA?s to obtain workers compensation insurance to protect the Association and management from potentially catastrophic liability. This coverage is going to cost your HOA approximately $550.00 per year."

The quotation is basically true in that there are recent court decisions that indicate homeowners associations and management companies can be held liable for covering injuries to subcontractors or workers of contractors who do not carry coverage to protect those persons. And the cases suggest that having the coverage would provide some beneficial protection to HOAs and management companies. However, I believe the word "force" is either too strong or taken out of context. There is no legal requirement that I know of "forcing" an HOA to buy the coverage. If someone thinks there is, I suggest sending it to me and I will pass it on to you, the readers of this blog.

Full post as published by California Condo & HOA Law on February 16, 2009 (boomark / email).