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NEW CALIFORNIA CONDO AND HOA DECISION
By Leland J. Hendrie CLU
President, PHD Insurance Brokers, Inc. |
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Based on recent court decisions some
confusion has been created as to whether or not an HOA and
their management company would both jointly be liable should
any person performing any labor or service for an HOA be
injured. If the injured worker doesn’t have worker’s
compensation, a recent State Worker’s Compensation Appeals
Court ruled that the HOA and the management company can be
jointly held liable.
While it doesn’t require the HOA or the management company
to carry worker’s compensation when the HOA has no direct
employees, it does leave both subject to potentially
catastrophic liability.
When you hire an independent contractor or a contractor who
is responsible to provide worker’s compensation for its
employees, you may still not be protected. If you get a
Certificate of Insurance from the contractor showing
worker’s compensation insurance, this will not guarantee
that the policy will not lapse for non-payment or some other
reason. You may also get a hold-harmless agreement from the
contractor and this will only be as good as the financial
strength of the contractor.
Do you hire part-time employees, seasonal employees or
independent contractors? This is a very important question
as it will determine who is responsible should a worker be
injured. While they may appear to be independent
contractors, they may actually end up being considered as
direct employees. All too often the HOA or management
company assumes that they won’t be responsible for any
worker’s injury, only to find out later that they are.
History shows that the courts overwhelmingly find in favor
of the injured person when there is a dispute over who
should have been responsible for insuring the injured
person. This may sound unfair, however the worker is the one
that is the first concern of the courts and worker’s
compensation system.
This is a serious risk that needs to be insured against.
When insurance is available for a nominal cost, the
Association and management company should not take on this
huge financial risk.
For more information about HOA and management company
worker’s compensation, please contact Kevin L. Hendrie at
(800) 640-4743 or at (714) 534-6310 to insure that you have
the proper coverage in place for this risk. |
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