If your HOA or condominium association has no employees, you may assume there is no reason to purchase workers’ compensation insurance. After all, if there are no employees, who would need workers’ compensation coverage?
Most community associations instead rely on outside contractors for landscaping, snow removal, trash collection, maintenance, repairs, and other services. While using insured contractors is an important risk-management practice, it doesn’t necessarily eliminate every potential workers’ compensation exposure for the association.
Why a Contractor’s Certificate of Insurance May Not Be Enough
Community associations should require contractors to provide a current Certificate of Insurance (COI) showing appropriate insurance coverage, including workers’ compensation when applicable.
However, a Certificate of Insurance generally reflects coverage at the time it is issued. It does not itself provide coverage or guarantee that the contractor’s policy will remain in force throughout the entire contract period.
A contractor’s workers’ compensation policy could later lapse or be cancelled. And even when a contractor has an active policy, not every person performing work for that contractor is necessarily covered as expected.
What Happens if a Contractor’s Worker Isn’t Covered?
Imagine that your association hires ABC Landscaping. ABC provides a valid Certificate of Insurance showing active workers’ compensation coverage.
During the busy season, however, ABC brings in an individual landscaper whom it considers an independent contractor or uses an uninsured subcontractor to help complete the work. That individual is then injured while working on the association’s property.
ABC’s workers’ compensation policy may be active, but there could be a dispute over whether the injured worker is covered under that policy.
Depending on state law and the circumstances surrounding the working relationship, an association could potentially face workers’ compensation obligations involving someone it did not consider to be its employee. This is sometimes related to the concept of a statutory employer, although the rules and definitions vary significantly by state.
Whether the contractor, association, or another party ultimately has responsibility will depend on the circumstances, applicable state law, contractual relationships, and available insurance coverage. But an injury involving an uninsured worker or disputed employment relationship can potentially draw the association into a claim it never expected.
What Is “If Any” Workers’ Compensation Insurance?
An “if any” workers’ compensation policy can be an additional risk-management tool for a community association that has no known employees.
The policy recognizes that the association does not currently have employees for whom it expects to pay workers’ compensation premium, while putting workers’ compensation coverage in place should the association have an unexpected exposure that falls within the policy.
This may be worth considering for HOAs and condominium associations that regularly hire contractors, subcontractors, maintenance personnel, or other vendors to perform work on community property.
Should Community Associations Still Collect Certificates of Insurance?
Absolutely. An “if any” workers’ compensation policy should complement—not replace—good contractor risk-management practices.
Community associations should continue to:
- Require appropriate insurance from contractors before work begins.
- Obtain and review current Certificates of Insurance.
- Include appropriate insurance and indemnification provisions in vendor contracts.
- Request updated certificates when policies expire.
- Work with their insurance advisor to determine appropriate coverage requirements based on the work being performed.
No single risk-management practice eliminates every potential exposure. These measures work together to help protect the association.
Does Your HOA or Condo Association Need Workers’ Compensation Insurance?
Having no employees doesn’t necessarily mean your community association has no workers’ compensation exposure.
Contractors are an essential part of operating most communities, but relying exclusively on a contractor’s insurance can create a potential gap if that coverage isn’t available—or doesn’t apply to a particular worker—when an injury occurs.
An “if any” workers’ compensation policy may provide an additional layer of protection for your association.
Frequently Asked Questions
Does an HOA need workers’ compensation insurance if it has no employees?
Not necessarily. However, having no direct employees doesn’t always mean an association has no potential workers’ compensation exposure. Associations that hire contractors should discuss their specific exposures and available coverage options with their insurance advisor.
Does a contractor’s Certificate of Insurance protect the HOA or condo association?
A Certificate of Insurance provides evidence that certain coverage existed when the certificate was issued. The certificate itself does not provide insurance coverage or guarantee that the contractor’s policy will remain in force.
What is an “if any” workers’ compensation policy?
An “if any” workers’ compensation policy is generally intended for an organization with no known employees but that wants workers’ compensation coverage in place should an unexpected exposure covered by the policy arise.
Can an association be responsible for an injured contractor or subcontractor?
Potentially. The answer depends on the facts, applicable state law, the employment relationship, contracts between the parties, and available insurance. Because workers’ compensation laws vary by state, associations should consult their insurance and legal advisors regarding their specific circumstances.
Talk With Your Community Association Insurance Advisor
Workers’ compensation can be easy to overlook when an association doesn’t have employees. But contractors, subcontractors, and unexpected employment relationships can create exposures that deserve consideration as part of the association’s overall insurance and risk-management program.
Community Risk Advisors can help your board or community manager evaluate whether an “if any” workers’ compensation policy makes sense for your association and provide a quote when appropriate.
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