Homeowner Associations » Workers' Compensation

Introduction to Workers' Compensation Insurance

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.


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