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Here’s Why You Should Get HOA Workers Comp Insurance

HOA workers comp insurance is a form of insurance coverage that community associations often neglect. However, its benefits can protect HOAs from potential liability and risk.


What Is HOA Workers Comp Insurance?

Homeowner Association Workers Compensation Insurance is a type of insurance that protects the HOA’s employees and volunteers. It helps shoulder the medical cost and lost wages in the event of a work-related illness or injury. Most HOA workers comp insurance policies cover only paid workers. However, some also cover volunteers and vendor employees. Hence, an HOA can also cover its committee and board members with the right insurance coverage.

Apart from these, some insurance policies with coverage for workers compensation for homeowners associations also offer death benefits for the dependents of the HOA’s employees. This compensates the bereaved families if the employee dies due to work-related incidents.


Is HOA Workers Comp Insurance Required?

Is HOA Workers Comp Insurance Required?Many states require businesses to have insurance coverage for workers’ compensation. It often becomes mandatory when a business employs a certain number of people. However, some states require it even if a business hires only one person. For instance, the state of California makes no-fault workers’ compensation insurance compulsory for employers even if the business only hires one employee.

These laws may seem to mandate this type of insurance for homeowners associations. On the other hand, despite working like a business, HOAs often don’t have the legal requirement to purchase workers’ compensation insurance. It’s usually optional, and there are no state-mandated coverage amounts for condo and homeowners associations.


Why Is HOA Workers Comp Insurance Important?

Does an HOA need workers comp insurance? While many homeowners associations can function properly without this type of insurance, it’s still a good policy to purchase. It offers multiple benefits.


1. Covering Vendor Employees

Homeowners associations work with many vendors to run the community. They may hire pressure washers, janitorial services, landscapers, and other contractors. These fulfill the HOA’s duty to keep property values high and protect the community’s interests.

However, these types of services carry certain risks with them. The employees of vendors that perform these jobs can suffer injuries while working within the HOA. While the contractor technically employs these employees, they can still hire an attorney and sue the HOA. This often happens when the vendor doesn’t have sufficient insurance coverage to protect their workers.


2. Financial Protection

Homeowners associations that employ personnel for various duties like groundskeeping, guarding gates, or other maintenance work will benefit from workers’ compensation insurance. That’s because it provides them with financial protection from compensating workers who sustain injuries or fall ill due to their jobs. They can also compensate the employees of their contractors who are affected by any workplace incidents.

Without proper coverage, the HOA may be held liable through a lawsuit. It may need to pay significant penalties that are much more expensive than what the insurance would cost. The HOA may need to tap into its reserve funds or levy hefty special assessments just to cover the costs. This is what makes workers comp insurance one of the most important types of HOA insurance an association needs.


3. Volunteer Coverage

Some HOA workers comp insurance policies cover volunteers. Hence, the HOA will not only be able to support paid workers but also unpaid workers such as committee members and board members. Homeowners associations with many volunteers should work closely with their insurance agents to ensure this is included in the policy.


How Much Coverage Is Necessary?

Homeowners associations that want more well-rounded coverage should purchase “If Any” insurance policies covering Voluntary Compensation (VC) Endorsement. This allows the HOA to protect the employees who might sustain bodily injuries from work-related tasks.

As for the amount, many states require employers to purchase a policy that covers at least $100,000 per bodily injury occurrence and $500,000 for diseases. However, the laws may vary per state so HOAs should review their state’s laws to verify the minimum requirements.


How Do HOAs Get Workers Comp Insurance?

Is workers comp insurance included in standard HOA insurance policies? Does homeowners insurance cover workers compensation? Unfortunately, most insurance policies for homeowners or HOAs do not cover workers compensation. Standard HOA insurance policies only offer General Liability coverage. This may cover the bodily injuries of HOA guests and homeowners, but it often excludes employees.

Some HOAs also mistakenly think that the insurance coverage of their management company is enough to cover vendors, contractors, and employees. However, a management company’s workers’ compensation insurance only covers the company’s workers. Its coverage will not extend to the HOA or the board that hired the company.

Hence, HOAs must purchase separate policies that cover workers’ compensation. They can do this by asking their current insurance provider if they can add more coverage. If not, they should look for insurance providers that offer this policy.


How Much Is HOA Workers Compensation Insurance?

How Much Is HOA Workers Compensation Insurance?The cost of this insurance policy varies per insurance company. It also varies depending on several factors, including an HOA’s size, job types, and the number of volunteers and employees. Insurance providers also look at the HOA’s past records to see how often workplace illnesses and injuries occur. This can increase the premium cost they charge.

That said, there’s no set amount for how much annual premiums will cost the HOA. Nonetheless, the premiums will certainly cost less than the financial penalties of workplace incidents.


Protect Your Community From Risks

HOA workers comp insurance is vital to protect the community from financial losses. After all, every HOA needs people to operate — and their jobs often carry certain physical risks. It’s better to be safe than sorry when it comes to protecting and compensating workers and volunteers. Otherwise, it could make the HOA financially unstable if it needs to levy heavy special assessments to cover the costs.

HOAs need lots of people to function properly. However, with HOA management software, an HOA can hire fewer people and reduce their liability for workplace incidents. Condo Manager is just the right software for the job. Contact us online or call us now at (800) 626-1267 to learn more!



7 HOA Insurance Policies Your Association Needs

There are many HOA insurance policies homeowners associations need to protect themselves. But, it can be challenging to know which ones your association needs to function. Not everything is essential. Regardless, there are a few insurance policies every association should get to keep themselves covered.


Important HOA Insurance Policies

There are many types of policies homeowners associations can get. Here are some of the most important ones to keep in mind.


1. HOA Master Insurance Policy

The master insurance policy is the most basic type of homeowners association insurance that covers all the general requirements. Sometimes, the master insurance is also called HOA Insurance. It also includes your General and Regular Liability Insurance. The master insurance policy typically covers two things:

  • Property damage to your HOA’s common areas and structures due to crime, water, fire, or vandalism
  • Liability expenses that others may hold the HOA liable for

Through this HOA hazard insurance policy, you can cover the cost of repairs to the property when something unexpected happens. For instance, flooding is one of the most common natural disasters in the US. When a flood damages your HOA’s shared spaces, the policy can fund the repair costs. It often acts as your HOA fire insurance policy to cover fire damage.

Apart from this, the master policy also provides liability coverage. This is useful for when third parties blame the HOA when they sustain injuries or property damage within the premises. It covers legal fees, attorney fees, medical expenses, and monetary damages the HOA needs to pay.

The amount your HOA needs to cover for liability will vary based on location. For instance, the Civil Code Section 5805 in California requires at least $2 million in protection for HOAs with separate interests less than or equal to 100. That amount can reach up to $3 million if your HOA has over 100 separate interests.


Are the Master Insurance and Special Assessment Insurance the Same?

A master insurance policy is distinct from an HOA special assessment insurance policy. While both of these insurance policies may cover issues with common area property damage, they are not the same.

Special assessment insurance, also called loss assessment coverage, mainly helps the homeowner, not the HOA. It covers the cost of special assessment fees the HOA may collect from homeowners when the master policy can’t cover everything.

For example, the HOA’s master insurance policy may cover only $1 million. But, the cost of repairs from property damage will amount to $2 million. The HOA will have to levy special assessment fees from homeowners to pay for the rest. Homeowners may not need to pay the additional fees if they’re insured with a special assessment policy.


2. D&O Liability Coverage

hoa master insurance policyDirectors and Officers (D&O) liability insurance is among the most important HOA insurance policies. It essentially protects the board of directors from various lawsuits and settlements against them.

The HOA board can cover defense expenses, omissions, errors, and indemnity liability claims through it. These usually happen when the board violates contracts or governing documents. The insurance policy also covers discrimination, libel, and slander.


3. Property Value and Replacement Cost

Your homeowners’ association insurance coverage should also include property value and replacement costs. This covers the partial or full replacement of your building or structure. The insurance policy has three coverages this type of policy includes:

  • Contingent Liability. Some states may require you to demolish all parts of a property, including undamaged ones, to rebuild the structure. This covers the undamaged portions, so your HOA does not need to shoulder the expense.
  • Demolition. This covers the cost of demolition, including those involving heavy machinery.
  • Increased Cost of Construction. Local ordinances may require necessary upgrades to your property. This covers the expenses of those upgrades.


4. Workers’ Compensation and Employee Dishonesty Insurance

Many HOAs employ workers to keep the community in good shape. In such cases, it’s vital to have Workers’ Compensation and Employee Dishonesty Insurance. That’s because this policy protects the HOA from lawsuits if a worker sustains an injury while working. It also covers theft and the damage any workers may cause to the property. The policy covers employees whether they’re contractual, part-time, or full-time workers.


5. Discrimination Claims Coverage

Homeowners’ associations may sometimes foreclose properties because of unpaid dues. They can do this regardless of whether the resident is part of a minority group or has a protected status. However, some homeowners may still try to hold onto their homes by filing a discrimination claim against the HOA.

This is why you may need Discrimination Claims Coverage. Through this policy, you can protect your HOA from claims related to discrimination while foreclosing properties.


6. Commercial Umbrella Policy

HOA Commercial Umbrella PolicyMany HOA insurance policies have limitations. If you want to go beyond these limits, you can also purchase Commercial Umbrella Liability Coverage. This helps you stay protected when your D&O or Workers’ Compensation policy can’t cover the costs. The umbrella may also expand your coverage on other policies.

Of course, you could simply extend the limit on your current policies. But, doing so may be costly for your HOA. A Commercial Umbrella Policy is usually more affordable, so many HOAs prefer it over extending other policies.


7. Condo Insurance

Condominiums may need HOA Condo Insurance instead of the standard HOA master policy. This is because figuring out the boundaries between common areas and individual units is more complicated in condos. Condo Insurance can offer more specific protection. It has two main types:

  • Bare Walls Coverage. Only walls divide condominium units. As such, maintenance insurance can be a little trickier. A Bare Walls insurance policy insures your condo’s walls, insulation, plumbing, and wiring.
  • All-in Coverage. This extends the Bare Walls policy by also covering installed fixtures like appliances and countertops.


Protect Your HOA With Insurance

HOA insurance policies protect both your HOA and its community members from any potential financial burdens. They cover expenses when an unexpected disaster happens and can lower your HOA charges’ special assessments. Hence, they’re essential to keeping your HOA running seamlessly throughout the year.

Tracking your insurance policies manually can be exhausting. It’s also prone to error, especially if you purchased many policies. Condo Manager can help automate and streamline the process. Call us at 800-626-1267 or get in touch with us online today!




What Is HOA Insurance? How Will Your HOA Benefit From It?

HOA insurance may not seem important at first. However, it’s crucial if you want to save your homeowners’ association from huge losses. What is HOA insurance, and how does it benefit your homeowners’ association? Let’s find out.


What Is HOA Insurance?

HOA insurance, or an HOA master insurance policy, protects your homeowners’ association from liability. It protects your association from potential financial losses in case an accident happens within the premises. Moreover, it covers physical damage sustained by your common areas and structures.


What Does HOA Insurance Cover?

Standard HOA insurance coverage doesn’t include every aspect of your homeowners’ association. In fact, it mainly covers HOA liability insurance and mainly encompasses the following:

  • hoa insurance coverageGeneral Liability. This includes expenses that the HOA may incur when there’s a lawsuit against the association. For example, someone may get injured within HOA property and hold the homeowners’ association liable. In such cases, your HOA insurance policy will cover the costs.
  • Physical Damage. This includes expenses related to damages against HOA infrastructure and common areas. It can help you cover repair costs after an accident or natural disaster like a fire or hailstorm.

These are the most basic things your HOA insurance will cover. However, coverage may vary depending on the insurance company and policy you get. Some companies may offer extensive coverage, while others only provide the essentials.

For example, some insurance policies don’t cover fire or flood-related damage. Hence, checking your HOA insurance policy to see what’s covered is crucial. You may then need to upgrade your policy or purchase extra insurance to cover other areas.


How Is Condo Insurance Different?

If your HOA manages a condominium, there can be a big difference in coverage. That’s because condominiums have blurrier lines that separate HOA property from homeowner property. As a result, condo insurance will further distinguish its policies by separating them into two kinds:

  • Bare Walls Coverage. This policy covers the basic structure of the condominium. It also covers everything within the walls, like plumbing, wiring, and insulation. With it, residents don’t need to insure their walls.
  • All-In Coverage. This policy includes bare walls coverage and extends its scope. On top of what’s covered in Bare Walls Coverage, it also covers installations like countertops and appliances. As a result, residents will only need to insure what’s not covered in the condo insurance policy.


How Does Your HOA Benefit?

Homeowners association insurance can be beneficial in many ways. The most obvious is that it protects your HOA from incurring unexpected and often substantial costs. Otherwise, your HOA must pay for physical damage and liability expenses through internal funds.

These costs can be high, especially if you pay for property damage due to earthquakes and hurricanes. Meanwhile, liability expenses can snowball into larger amounts because of the legal and settlement fees. Even if your HOA wins the lawsuit, the associated costs in legal defense can be tremendous.

Furthermore, some states require insurance for homeowners associations. For example, the state of California requires at least 2 million dollars in HOA coverage through Civil Code Section 5805. Meanwhile, Arizona also has certain HOA insurance requirements for HOAs and condominiums. In addition, some HOA bylaws require at least some insurance coverage.


What Type of Coverage Does Your HOA Need?

Getting basic insurance for HOA is necessary, but it doesn’t stop there. That’s because you should also sufficiently cover your HOA’s other needs. To cover those, your HOA may also need the following:

  • Comprehensive General Liability. This includes general liability coverage for those outside of your regular HOA insurance policy.
  • Comprehensive Equipment Coverage. This covers damaged equipment that your HOA master policy doesn’t protect. They can include general equipment or specific ones, depending on the provider.
  • Catastrophe Insurance. This covers property damage from natural disasters like hurricanes, earthquakes, and typhoons.
  • Workers’ Compensation Coverage. This covers employee injuries and claims against the HOA when a worker gets injured.
  • Discrimination Coverage. This covers the related costs when someone, like an evicted tenant, makes a discrimination claim against the HOA.
  • Crime and Fidelity Insurance or Employee Dishonesty Coverage. This protects the HOA from losses when a board member or employee commits a crime or steals property.
  • Directors & Officers (D&O) Liability Insurance. This covers directors and HOA board members who may be accused of wrongful acts. It shields them from personal liability as long as the acts are unintentional.

Remember that what you include in your HOA insurance policy will depend on your community. For example, your HOA may need Catastrophe Insurance if your community is more vulnerable. Furthermore, smaller communities may not need Workers’ Compensation Coverage because it doesn’t employ as many workers tending to common areas.

Remember to assess your community’s needs before purchasing a policy. Ensure the policy you choose will provide sufficient coverage to protect your HOA. In addition, it’s equally important to ensure no overlapping policies. Otherwise, your homeowners will have to pay bloated assessment fees.


hoa master insurance policyWhat If Your HOA Insurance Doesn’t Have Sufficient Coverage?

If you don’t have enough coverage, don’t worry. Most insurance policies renew every year. Therefore, you can upgrade your policy once the term ends. Just remember to review your current policy and the upgrades you need to purchase.


How Much Is HOA Insurance?

The cost of a policy varies between HOA insurance companies. It also depends on the coverage, number of shared areas, and community size. Typically, HOA insurance may cost anywhere between $500 to $1,500 annually.

However, remember that these amounts may change depending on the claim rates. If the past year had more claims, your insurance provider might bump up the price. Moreover, insurance companies may increase the rates the older your equipment and infrastructure become.


Who Pays for HOA Insurance?

HOA insurance premiums are charged to homeowners. It’s usually included in their monthly dues. Furthermore, each homeowner typically pays the same amount as long as they have equal access to shared spaces. Also, board members are not exempt from paying insurance premiums and monthly dues. They’re expected to pay their share as long as they live within the community.


Protect Your HOA With Insurance

Many people think HOA insurance is only important because state laws and HOA bylaws require it. However, it’s more than just that. It’s a necessary expense to protect your HOA from unforeseen costs.

Keeping tabs on your various insurance policies can be difficult, especially if you have multiple add-ons. Fortunately, Condo Manager can assist you and make the process much easier. Call us at 800-626-1267 or contact us online to ask for a free demo!




No Common Areas In Your HOA? Do You Still Need HOA Liability Insurance?

An HOA liability insurance is essential. It protects your homeowners’ association against liability claims. But what if you don’t have shared spaces in your HOA? Do you still need the insurance?


What Is HOA Liability Insurance?

An HOA liability insurance is a policy that protects associations from liability claims. What does HOA liability insurance cover? There are two types that HOAs can get:

  • Regular Liability Insurance. This covers liability costs related to injuries people may suffer in a common area. For example, your HOA may be held responsible when someone slips on a common area’s wet floor. This covers the costs your HOA may need to pay as a result.
  • HOA General Liability Insurance. This covers common area property damage, building protection, and structure protection. It can protect the property from different perils like wind, water, fire, vandalism, and crime.

For both of these, the policy only covers common areas and properties. Moreover, the HOA must own or be responsible for maintaining said properties. It does not cover property that belongs to homeowners or residents.


Is It Different From HOA Insurance?

An HOA insurance policy, or master policy, helps HOAs reduce financial risk. This insurance policy is usually helpful for shouldering liability claims and property damages.

HOA insurance coverage can also include other things. For instance, it may protect board members from legal claims made against them. Moreover, it may even include HOA liability insurance covering vendors and employees.

Meanwhile, liability insurance is part of an HOA insurance policy’s basic coverage. Homeowners’ associations can keep or remove it, depending on the HOA’s wants and needs.


Do You Still Need Liability Insurance Without Common Areas?

A homeowners’ association still needs liability insurance even without common areas, but why is that?

It’s easy to want to forego HOA liability insurance. This is especially tempting if you don’t have public facilities like clubhouses, pools, or gyms. After all, there’s no property to protect from damage. Moreover, without these facilities, people can’t hold your HOA responsible for injuries.

But common areas aren’t limited to these amenities. That’s because any space that residents share is considered a common area. These include spaces and properties as simple as roads and mail facilities. In a condominium, these can also include public stairwells, elevators, and hallways.

With HOA liability insurance coverage, you can protect your property from natural disasters. These include things like hailstorms, fires, and earthquakes.

You also don’t have to pay as much legal expenses when someone has an accident. The insurance policy will cover the cost of damages as well.

Additionally, some states require HOAs to have insurance against liability and property damage. For example, Arizona and West Virginia have certain liability insurance requirements. They mandate communities to have insurance for common property damage and liability.

Overall, liability insurance is an effective way to lessen your financial burden whenever accidents happen in the community. Otherwise, you may need to tap into your reserve funds to cover the expenses. The cost of repairs, liability, and HOA attorney fees can be more expensive in the long run.


Are They the Same in Condominiums?

Both homeowners’ associations and condominium associations need liability insurance. But, an HOA policy insurance for a condo will differ slightly in how it works.

That’s because the lines that divide resident and HOA-owned property aren’t as clear. Often, they’re only separated by walls.

As such, insurance companies may offer different policy options for condominiums. These include the following:

  • Studs-Out Coverage. This option covers parts of the condominium outside a homeowner’s unit. These include roofs, stairways, hallways, lobbies, and elevators. It does not cover the walls, fixtures, and flooring within units. The homeowners will be responsible for insuring those interior elements.
  • All-In Coverage. This option protects both shared facilities and structural elements within residential units. Hence, homeowners will only need to insure their property inside their homes.


What Are the Limitations?

While liability insurance generally covers common areas against perils, there are limitations. For example, some policies do not cover floods. Thus, an HOA may need to purchase a separate property insurance policy to protect against flooding.

With that said, it’s important to read the insurance policy thoroughly. If a policy doesn’t cover everything you need, you may want to add coverage through other policies.

Moreover, liability insurance does not cover fidelity insurance. The latter is a type of insurance that covers HOA property, but it’s distinct because it doesn’t protect you from perils like natural disasters. Instead, it protects HOA property from immoral or dishonest actions made by board members and employees.


How Much Is It?

Insurance policies like these vary greatly in terms of cost. It usually depends on how large the HOA is and how many facilities it has. Larger communities with more amenities can expect to pay more. Meanwhile, smaller communities have less to pay for. They may only need to insure the basics like roads and walkways.

Also, insurance companies will evaluate other elements of the HOA to determine the price. They will review the number of residents, environment, and facilities within the community.

Typically, HOA policies that cover liability insurance can cost anywhere between $50 to $100 monthly. This is the price for small associations. Thus, an average HOA may pay up to $1,200 yearly.


Who Pays for It?

Each community resident, including board members, pays premium dues to the HOA. This is part of the monthly dues and will cover the cost of the liability insurance.

Furthermore, each resident will pay the same amount to the HOA. This holds true if everyone has equal access to the shared facilities. It applies regardless of how often each homeowner uses those shared spaces.


HOA Liability Insurance: A Necessary Inclusion

Having no shared spaces may make HOA liability insurance seem unnecessary. But it’s essential even if you don’t have pools or clubhouses. That’s because it also covers standard common areas like walkways and roads.

Tracking insurance policies and payments may be difficult for HOAs. You can make this process easier by using Condo Manager. Get in touch with us at 800-626-1267 or contact us online to schedule a free demo!