Timothy Cline Insurance Agency, Inc.
Homeowner Associations »
Introduction
Workers’ Compensation is required by law. Any association
that has employees on the payroll must maintain a workers compensation
policy. But what if the association does not have any employees
and all work is contracted? Should the Association still maintain
a workers compensation policy? The answer is a resounding “yes.”
This scenario is all too common. If an association ever hired
a non licensed contractor, or hired a licensed contractor who
does not maintain an active workers compensation policy at the
time of loss, then the association could be deemed to be the
employer. If that contractor misrepresented the fact that they
maintained a workers compensation policy, and an accident occurs
while on the job, the state of California could still consider
the association to be the employer of that injured worker, and
liable for all medical payments that result. The law also prohibits
the Association from entering into a contract to avoid workers’ compensation
insurance.
With this in mind, it is important for all associations, whether
big or small to maintain worker’s compensation coverage.
Even with a workers compensation policy in effect, it’s
still imperative that the Board contract with ONLY licensed contractor
with a workers compensation policy in force. The Board should
request a Certificate of Insurance evidencing the workers compensation
coverage and such evidence should be in the Board’s possession
prior to the work commencing.