SandyW1
(California)
Posts:12
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| 07/02/2008 11:30 AM |
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We are an association out of California. The board recently discovered we were paying a "workers comp policy". We asked our management company why we would have such a policy. Their response was "Well, if a worker we hire forgets to pay their premium the assocation would be covered" Make no sense. We cancelled it. Right??? Need some thoughts. I called our insurance carrier and they never have heard of anything like that.
Sandy
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MaryA1
(Arizona)
Posts:2498
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| 07/02/2008 12:08 PM |
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Sandy,
Warped thinking in my opinion! The contractor should have his own workmen's comp policy. If he forgets to pay the premium, he doesn't get hired -- it's as simple as that. |
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SusanW1
(Michigan)
Posts:2316
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| 07/02/2008 12:12 PM |
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How much were you paying?
If it's not much, I'd leave it. If you have many companies that you hire, including sole propriortors or with a DBA, this could come in handy. |
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MaryA1
(Arizona)
Posts:2498
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| 07/02/2008 12:20 PM |
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Posted By SusanW1 on 07/02/2008 12:12 PM
How much were you paying?
If it's not much, I'd leave it. If you have many companies that you hire, including sole propriortors or with a DBA, this could come in handy.
There's no reason why a person operating a business as a sole proprietor cannot obtain a workmen's comp policy. Frankly, it's an unnecessary expense for the HOA. It's the contractor's obligation to have the required insurance to operate his business. |
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RogerB
(Colorado)
Posts:3725
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| 07/02/2008 12:21 PM |
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| Sandy, it is a good idea for an HOA to consider having Workers' compensation insurance. What if a contractor fails to maintain their workers' comp or what if a contractor you hire ends up with a sub-contractor who does not have workers' comp and there is a serious accident? Your HOA could be found liable. |
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Roger Borcherding
Official HOATalk.com Sponsor
DARCO Property Management (Colorado)
(303) 925-0150 
*See legal notice below (end of page) or go to www.hoatalk.com/legal |
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MikeS1
Posts:0
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| 07/02/2008 12:28 PM |
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| Isn't that why we ask for COIs and keep them updated? |
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SandyW1
(California)
Posts:12
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| 07/02/2008 1:31 PM |
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| It was $600.00 a year. I agree with MaryA1. We hire a management company to make sure that all workers doing work on our property our fully insured and up to date. All of that should be reviewed before hiring them. If they get hurt, why would it be our fault? They do not work for us they work for a company. We do have liability insurance. I appreicate all the responses. The mamangement company is trying to convince us we made a mistake in cancelling the policy. I THINK NOT!!!! |
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SandyW1
(California)
Posts:12
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| 07/02/2008 1:46 PM |
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| One more thing. If our management company is hiring workers without insurance and their is an accident and we get sued. We are also going to sue the management company for breach of contract. |
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MikeS1
Posts:0
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| 07/02/2008 1:51 PM |
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| Ask the subcontractor for Certificates of Insurance and keep them updated. It's my understanding that if there is an underlying exposure without a COI, that the insurance carrier might pick this up in an audit and then send you an interim audit billing based on the additional exposure that wasn't contemplated initially when the policy term started. |
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BradP
(Kansas)
Posts:1742
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| 07/02/2008 2:01 PM |
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| I don't see any reason to have it...it should be part of your contract with the contractor and you should always ask for copy of insurance. I see Roger's point of having a back-up, but at the same time you have decide if it is cost effective to do so. |
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GlenL
(Ohio)
Posts:1466
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| 07/02/2008 2:10 PM |
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| The only reason to have a workman's comp policy is for your own employee, a person on the HOA's payroll who you pay all the other employment taxes for, not an outside vendor who you have no direct control or responsibility for. You should require contractors to provide a copy of their business license and insurance certificate before you hire them and require the MC to keep them updated. |
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KirkW1
(Texas)
Posts:1190
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| 07/02/2008 3:48 PM |
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... We are also going to sue the management company for breach of contract.
Except that your contract indemnifies the management company. So other then paying for a legal bill you are in the same boat you started. |
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GlenL
(Ohio)
Posts:1466
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| 07/02/2008 3:59 PM |
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Posted By KirkW1 on 07/02/2008 3:48 PM ... We are also going to sue the management company for breach of contract. Except that your contract indemnifies the management company. So other then paying for a legal bill you are in the same boat you started.
Look at the whole quote Kirk, if they get sued because the MC hires someone without proper insurance and they (the HOA) get sued then they're going to sue the MC. If their contract requires that the MC do a certain act i.e. only hire insured contractors and the MC deliberately doesn't do that or make a reasonable effort to insure that procedure is followed and a problem occurs then the indemnity clause wouldn't protect the MC. |
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KarenS11
(Florida)
Posts:145
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| 07/02/2008 7:19 PM |
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When folks sue, they include any entity that has assets. In Florida, a sole proprietor does not need workers comp. If he/she comes to do a job and brings a helper along, the helper could be injured and come back on the association.
If named in a suit, it would cost much more than the $600 cost of the policy to hire an attorney to defend the association. Even if you "win", the legal fees would be much greater - what with attorneys getting $250-$300 an hour. |
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BradP
(Kansas)
Posts:1742
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| 07/03/2008 6:26 AM |
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Posted By KarenS11 on 07/02/2008 7:19 PM
When folks sue, they include any entity that has assets. In Florida, a sole proprietor does not need workers comp. If he/she comes to do a job and brings a helper along, the helper could be injured and come back on the association.
If named in a suit, it would cost much more than the $600 cost of the policy to hire an attorney to defend the association. Even if you "win", the legal fees would be much greater - what with attorneys getting $250-$300 an hour.
Karen:
That is why the HOA should be particular about who it hires, if I were in Florida and a sole proprietor wanted to do work for me I would tell them to get workers comp insurance and show me proof. This is me as a homeowner, the HOA should do the same. If they want the job bad enough they will get it. |
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BradP
(Kansas)
Posts:1742
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| 07/03/2008 6:29 AM |
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Posted By KirkW1 on 07/02/2008 3:48 PM ... We are also going to sue the management company for breach of contract. Except that your contract indemnifies the management company. So other then paying for a legal bill you are in the same boat you started.
Indemnifications will not protect you from gross negligence...which it could be argued that failure to obtain certificates of insurance would fall in that category. That is pretty much standard operating procedure. |
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JohnD14
(New York)
Posts:4
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| 07/03/2008 6:46 AM |
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| It's nice to see that we have so many licensed Insurance professional agents and so many attorneys here that know the worker's comp laws as they relate to different states. |
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MicheleD
(Kentucky)
Posts:1866
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| 07/03/2008 7:06 AM |
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Excuse me, but last I checked this was HOAtalk, not Attorney and/or Insurance professionals talk.
Read the disclaimer. No one is providing legal or professional advice.
Which is a good thing because apparently no one here is PAYING or legal or professional advice.
Funny how that balances out. . .
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DwightT
(Idaho)
Posts:483
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| 07/03/2008 7:17 AM |
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JohnD14 - you are apparently new here. I would suggest that along with the posting guidelines, you also read the "General Legal Notice" at the bottom of every page in the forum. One of the first things that you should see there is "Messages posted by HOATalk or other members are for informational purposes only, are not legal or professional advice and do not constitute an attorney-client relationship."
Please keep in mind that this is a discussion forum and most things posted here are opinions based on experiences. If seeing somebody's opinion offends you, well there are always other forums. |
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RogerB
(Colorado)
Posts:3725
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| 07/03/2008 8:28 AM |
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Posted By BradP on 07/02/2008 2:01 PM
I don't see any reason to have it...it should be part of your contract with the contractor and you should always ask for copy of insurance. I see Roger's point of having a back-up, but at the same time you have decide if it is cost effective to do so.
I agree Brad. It depends on the circumstances for each individual HOA. If a worker is injured a good attorney will look to all pockets and the deepest definitely need to weigh the risk vs cost of coverage.
As I stated "Sandy, it is a good idea for an HOA to consider having Workers' compensation insurance."
FYI, our management agreements require the Board to select and hire their independent contractors and to provide proof of insurance. It also requires the HOA to indemnify and cover us if there is a suit against us.
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Roger Borcherding
Official HOATalk.com Sponsor
DARCO Property Management (Colorado)
(303) 925-0150
*See legal notice below (end of page) or go to www.hoatalk.com/legal |
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JohnD14
(New York)
Posts:4
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| 07/03/2008 11:19 AM |
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| Yes, and your advice is certainly worth the price that you pay for the poor advice. Too bad that most of you (not all) don't know what you're talking about. |
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MaryA1
(Arizona)
Posts:2498
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| 07/03/2008 11:29 AM |
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Posted By GlenL on 07/02/2008 3:59 PM Posted By KirkW1 on 07/02/2008 3:48 PM ... We are also going to sue the management company for breach of contract. Except that your contract indemnifies the management company. So other then paying for a legal bill you are in the same boat you started. Look at the whole quote Kirk, if they get sued because the MC hires someone without proper insurance and they (the HOA) get sued then they're going to sue the MC. If their contract requires that the MC do a certain act i.e. only hire insured contractors and the MC deliberately doesn't do that or make a reasonable effort to insure that procedure is followed and a problem occurs then the indemnity clause wouldn't protect the MC.
Since I'm no longer a board member (my assn was self managed) I'm not familiar with all aspects of mgmt co contracts, so I'm not sure it would contain a clause about hiring contractors. But, the bottom line is that the board is resp. for running the assn, not the manager. The mgr might send out the bids, but the board should be making the decision on who to hire. In doing so, they should know whether or not the contractor they want to hire has workmen's comp ins or not. I haven't heard of any lawsuits against a mgmt co because the manager did something the board did not agree to.
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MicheleD
(Kentucky)
Posts:1866
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| 07/03/2008 12:09 PM |
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Posted By JohnD14 on 07/03/2008 11:19 AM
Yes, and your advice is certainly worth the price that you pay for the poor advice. Too bad that most of you (not all) don't know what you're talking about.
We aim to please!
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KarenS11
(Florida)
Posts:145
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| 07/03/2008 4:49 PM |
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Posted By JohnD14 on 07/03/2008 11:19 AM
Yes, and your advice is certainly worth the price that you pay for the poor advice. Too bad that most of you (not all) don't know what you're talking about.
Enlighten us,please!
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