What if the Unthinkable Happens?
Someone gets hurt performing work for your association on the community association premises. Do you know if the injured worker is covered by their own Workers’ Compensation coverage? The answer could be very costly for your association if the answer is “no,” as liability for an injury or mishap could potentially cost thousands of dollars in medical expenses and lost wages.
Often you may find yourself hiring independent contractors to do work (or perform services) for your association. These individuals should be considered employees of your association and like any employee, you should carry Workers’ Compensation insurance in the unlikely event they have an accident or get injured on the job.
What you should know when hiring an unlicensed independent contractor
If an unlicensed person or someone to perform causal labor is hired to do association work that would otherwise qualify him or her for a license, he or she will be presumed an employee of your association. So, if he or she sustains an injury, the association is responsible for the work-related injury. The independent contractor, who has become the worker, can never waive his or her rights.
Additionally the state Workers’ Compensation board will closely examine the working relationship to established “employee” status. Even with contractor provided proof of insurance, there is no guarantee that coverage will be in force at the time an accident or injury may occur. This could expose your association to a great deal of responsibility and create a contingent third party liability claim if the contractor and/or any of his or her subcontractors get hurt.
If your association fails to provide Workers’ Compensation insurance for an injured worker, the association could be liable for:
- All benefits that would normally be available under Workers’ Compensation coverage
- Extraneous damages of 10% above all benefits, plus
- Damages in a civil lawsuit and,
- Be subject to severe punitive government policies if the association is found guilty of a misdemeanor
By utilizing good risk management, you can avoid these costly mishaps. By simply obtaining a minimum Workers’ Compensation policy for your community association, you could protect from and provide a savings for a potential injury that will fall squarely on the shoulders of the Association and its Board.
Keep in mind: Property managers may be viewed as having the professional responsibility to at least recommend coverage. For your own protection, as well as that of the association, document your recommendation and require every vendor to provide up-to-date Workers’ Compensation coverage.
A Workers’ Compensation policy may be purchased, even if there are no current employees, by most any organization. It is really the only way an association can protect itself against the potential injuries of those working on the association property.