Workers' Compensation - Is Your Association Protected?
Associations need workers' compensation coverage as they can be held responsible for medical costs and lost wages for an injured contractor if there is no insurance in place.
The due diligence of an association is to require and obtain certificates of insurance before hiring any contractors who will be working on association property. The certificate of insurance should show general liability coverage with a minimum limit of $1,000,000. The certificate should also show workers compensation coverage at the statutory limits.
Where the association could become responsible for medical costs to an injured contractor is if that contractor either does not have work comp coverage or has let his work comp policy lapse. Under these circumstances, the association could be asked to pay for the injured contractors medical bills and lost wages. The best way to protect the association from having to pay out of the association general funds is to purchase a minimum premium worker's compensation policy.
Currently a minimum premium worker's compensation policy has an annual cost of $336, due at the time of binding coverage. At the end of the policy term, the association will be asked to complete an audit worksheet. Assuming the association has no employees and no payroll and all contractors hired by the association provided the proper certificates of insurance, the association will receive a refund. The insurance company keeps an annual expense fee of $195 and returns $141 to the association.
Purchasing a minimum premium workers' compensation policy is a very inexpensive way to ensure peace of mind and avoid any surprise outlay of association funds.