There are many kinds of insurance that a homeowners association may need to protect its buildings, common areas, board members, funds, and day-to-day operations. One coverage that is sometimes overlooked is HOA worker’s compensation insurance.
HOA worker’s comp is designed to help protect the association when an employee is injured or becomes ill because of work-related duties. This may include medical expenses, lost wages, disability benefits, occupational illness claims, and certain employer liability situations. Workers’ compensation rules vary by state, but many employers are required to carry coverage once they have employees. In Illinois, for example, employers are generally required to provide workers’ compensation insurance for almost everyone hired, injured, or whose employment is localized in Illinois.
Here are the basic situations that can help an HOA board understand when worker’s comp may be needed.
The HOA Has Direct Employees
If the HOA directly hires employees, worker’s comp should be reviewed carefully. This can include full-time, part-time, seasonal, or temporary employees depending on state rules.
Examples may include:
Maintenance Staff
Some communities hire maintenance workers to handle repairs, cleaning, lighting, trash areas, minor plumbing issues, snow removal, or general upkeep. These workers may face risks such as slips and falls, lifting injuries, equipment accidents, cuts, burns, or repetitive strain.
Landscaping or Groundskeeping Employees
If the HOA employs its own landscaping or groundskeeping crew, worker’s comp may be important because outdoor work can involve lawn equipment, uneven surfaces, heat exposure, falling branches, chemicals, or other hazards.
Security Staff
An HOA that directly employs gate attendants, patrol staff, parking monitors, or other security personnel may need worker’s comp coverage. These roles can involve walking the property, responding to incidents, monitoring common areas, or working late hours.
Office or Administrative Staff
Even if an employee works in a clubhouse office or management office, there may still be work-related injury risks. These can include slips and falls, ergonomic injuries, repetitive-motion injuries, or accidents while performing errands for the association.
On-Site Management Employees
Some HOAs directly employ an on-site manager or property coordinator. If that person is on the HOA payroll, worker’s comp requirements should be reviewed. The job may include office work, property inspections, vendor coordination, resident communication, and walking through common areas.
The HOA Uses Part-Time or Seasonal Workers
Some associations assume worker’s comp is only for large employers with many full-time employees. That is not always true. A part-time pool attendant, seasonal maintenance helper, temporary office assistant, or snow removal employee may still create a worker’s comp exposure.
The number of employees required before coverage is mandatory depends on state law. This is why it is important to review your state’s requirements before assuming your HOA is exempt.
The HOA Pays People Directly
If the HOA pays a person directly for labor, the board should ask whether that person is truly an independent contractor or actually functioning as an employee.
This distinction matters. If the association controls the schedule, tools, duties, supervision, and method of work, there may be a stronger argument that the worker is an employee. If there is an injury, this question can become very important.
The HOA Works With Contractors
Many HOAs use outside vendors for landscaping, repairs, roofing, snow removal, pool service, pest control, janitorial work, or security. In these cases, the HOA may not need to cover the contractor’s employees under the HOA’s own worker’s comp policy, but the association should still request certificates of insurance.
The HOA should ask vendors for proof of worker’s compensation coverage before work begins. This helps reduce the chance that an uninsured contractor’s injury becomes a problem for the association.
The HOA Has Volunteers
Many HOA board members and community volunteers help with events, cleanup days, committees, or small projects. Worker’s comp coverage for volunteers is not always automatic and may depend on the policy and state law.
If volunteers are doing physical work, such as setting up events, lifting supplies, cleaning common areas, or helping with community projects, the HOA should ask its insurance agent how volunteer injuries are handled.
The HOA Has a Clubhouse, Pool, or Common Facilities
An HOA with shared amenities may have more worker exposure than a community with only basic common areas. A clubhouse, pool, gym, parking lot, gatehouse, playground, or landscaped grounds may require employees or vendors to perform regular maintenance.
The more active the property is, the more important it becomes to review who is doing the work and whether the proper coverage is in place.
The HOA Wants to Avoid Coverage Gaps
Worker’s comp can help with covered medical treatment, wage replacement, rehabilitation, disability benefits, and other costs connected to job-related injuries or occupational illness. The U.S. Department of Labor describes workers’ compensation programs as providing benefits such as wage replacement, medical treatment, vocational rehabilitation, and other benefits for covered workers.
Without proper coverage, an HOA may face unexpected costs, legal issues, penalties, or disputes after an injury.
The HOA Needs Certificates or Compliance Support
Some property managers, lenders, vendors, or governing documents may require proof that the HOA has certain insurance policies in place. Worker’s comp certificates can also be requested when employees or contractors are involved.
Keeping the right insurance documentation helps the HOA stay organized and prepared.
The HOA Wants to Protect Its Budget
A serious workplace injury can create financial strain. Worker’s comp helps transfer certain employee injury costs away from the association’s operating budget and reserves.
This matters because HOA budgets are built from homeowner assessments. A large uninsured claim can affect the entire community.
The HOA Wants Better Risk Management
Worker’s comp is not just about claims after an accident. It can also support better planning. HOAs can reduce risk by reviewing job duties, requiring proper training, documenting safety procedures, separating employees from independent contractors, and confirming that vendors carry their own coverage.
These steps may also help control long-term insurance costs.
Common HOA Worker’s Comp Questions
Does an HOA need worker’s comp if it has no employees?
Maybe not, but the HOA should still review its vendor contracts and certificates of insurance. If the association uses independent contractors, it should confirm that those contractors carry their own worker’s comp coverage.
Does an HOA need worker’s comp for one part-time employee?
It may. Some states require worker’s compensation coverage even when there is only one employee. The answer depends on the state, the type of work, and the employment arrangement.
Are board members covered by worker’s comp?
Usually, board members are not treated the same as employees simply because they serve on the board. However, volunteer and board member injury coverage can vary. The HOA should review this with its insurance agent.
Is worker’s comp included in HOA property insurance?
Usually, worker’s comp is a separate coverage from the HOA master property policy. HOA property insurance is generally focused on buildings, common areas, and related property or liability protections. Worker’s comp is focused on work-related employee injuries and occupational illness.
What should an HOA review before buying worker’s comp?
The HOA should review whether it has employees, how workers are classified, payroll amounts, job duties, vendor certificates, state requirements, and any property management responsibilities.
At StarNet Insurance Group, we’re here to help HOA boards and property managers navigate the complexities of HOA insurance. Whether your community needs HOA property insurance, general liability, D&O, umbrella coverage, crime/fidelity coverage, or HOA worker’s comp insurance, we can help you build coverage that fits your association’s responsibilities, budget, and risk.
To schedule a consultation, please call us at (312) 445-7777.
