Is Your Association Covered by Workers’ Compensation Insurance?

by admin on February 24, 2010

in Insurance, Management, Operations

Hope He Is Covered!

If your association has any employees, employs any contractors or has any outside contractors that may do work for owners while on association grounds, then your association needs to be covered by Workers’ Compensation Insurance, in some form.  

Your association employees need to have this coverage, as it is required by law.  The amount of the workers’ compensation will be based on the association’s payroll and employee classification.  For instance, an office clerk is rated much lower than an outside worker, as an outside worker has a better chance of being hurt on the job than an office worker.  Thus, the amount of the payroll and the combination of the different classes of workers will ultimately determine the total insurance premiums.  During the course of the year your payroll will audited to determine the final amount owed, as payrolls may increase or decrease throughout the year. 

Associations that do not have employees but receive services from contractors should insist that the contractor provide proof of worker’s compensation insurance prior to doing any work.  The reason for this is that if the contractor did not have this insurance and one of his workers was hurt on the job, the association may be deemed liable.  This does not seem fair, but that is the way it is.  An association that does not have a worker’s compensation policy could end up spending thousands of its own dollars to compensate the injured worker.  

We have seen associations that were audited and when they could not provide proof of insurance for a certain contractor to the auditor, the association was then charged a premium for the period of time that the subcontractor failed to carry adequate coverage while performing on the association property.   

Associations are prudent when purchasing workers’ compensation insurance policies rather than hoping that their contractors’ policies are current and paid. Associations can obtain a “general” workers’ compensation policy that should cover them for anyone, other than their own employees, who work on their association property.

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