Answer: Associations should carry workers compensation even if they do not hire employees. Despite an association’s lack of employees or any direct payroll, the association may still be held liable and deemed an employer in some situations. Several recent court decisions considered homeowners associations’ employers at the time of loss. In the much discussed case of Heiman vs. Workers’ Compensation Appeals Board (2007) a community manager unknowingly hired an uninsured contractor. The contractor’s employee suffered serious injuries while performing work to the association. Ultimately the association, community manager and unlicensed contractor were held liable as employers. Ensuring a workers compensation policy will prevent out of pocket expenses to the association when/if deemed the employer. Most workers compensation policies name volunteer board members and committee members as “employees” of the association. This can be beneficial if a board member is injured while performing board specific duties.
Obtaining a zero payroll based workers compensation policy is relatively quick and simple and the cost is nominal with minimum premiums starting at around $500. In order to avoid unexpected assessments, we recommend all associations strongly consider the added policy.