Workers’ Comp Insurance | HOA insurance

Workers’ Comp

May 10, 2022

Does Your HOA need Workers’ Comp Insurance?

Workers’ compensation is a common form of insurance that many businesses employ to protect their leadership and reputation. Although workers’ compensation is required in many states across the nation, Texas allows its business owners the choice to enact this type of insurance.

Associations are part of an industry that makes money from owners, therefore making them a business. Business protection from all is paramount. So, let’s take a deeper look at workers comp insurance and whether or not it’s an expense your association should adopt.

What is Workers’ Compensation Insurance?

You are legally required to keep your association a safe place for volunteer and employment purposes. However, accidents happen, and when they do, your association could easily be held liable.

If a board member, volunteer, or vendor is injured while performing any HOA duties your association’s finances and reputation are at stake if the injured person pursues a lawsuit. Workers’ comp essentially serves as security insurance that stops lawsuits in their tracks and prevents your association from paying compensation to injured parties out of its annual budget.

Why Would an Association Need Workers’ Comp Insurance?

Although an HOA isn’t the total standard business that has full-time employees performing its daily duties, it’s still recommended that a responsible association invests in a reliable workers’ compensation insurance plan.

Let’s get into why.

Not All Would-Be Vendors Are Honest

Just because a vendor says they are insured and provides “proof” of insurance, doesn’t mean their coverage is in effect.

Therefore, if something were to happen to a vendor that injured them on the job, your association would be held liable. Workers’ comp insurance helps your association avoid any legal troubles and serves as protection against any vendors that attempt to pull the insurance wool over your board’s eyes.

Workers’ Comp Covers Board Members and Volunteers

The community members that bring an association together are mainly a collective of local volunteers. If someone were to get injured while carrying out any association tasks, your workers’ comp insurance would ensure their medical/financial needs are met and that your association is thoroughly covered.

How Much Coverage Does an Association Need?

While there really isn’t a general average for coverage, it’s safe to say that the amount of coverage necessary depends on the size of the association and the level of work required to maintain it.

Your association management team can help your Board make an educated decision about how much workers comp coverage your organization needs. Keep in mind that if you are working with an association management company, that organization’s workers’ compensation coverage does not apply to your HOA in the event that something goes wrong.

Cover Your Association’s Insurance Needs with Chaparral Management

If you have questions about the different types of insurance your association needs for security, the team at Chaparral Management can help! We have experienced association management professionals that can give your Board the assistance it needs to create a successful and pleasant association for its members.