All Co-ops and Condos Need Workers' Comp Insurance

Courtney Ferretti is a senior account manager at the insurance brokerage Mackoul Risk Solutions. She answered questions about the importance of workers' compensation insurance.

If a co-op or condo doesn't have any employees, there's no reason to have workers’ compensation insurance, is there?

There is a reason they should have a workers’ compensation policy. An “if any” workers’ compensation policy would provide coverage if the contractor hired by the association does not have workers’ compensation coverage and their employee is injured at the building, or if a volunteer/board member is injured during the course of their duties. Example: A volunteer could be injured while moving trash bins or slip on ice while doing work at the building. 

Would the board or the building be liable?

In the event that an uninsured contractor is injured at the building, the association may be required to step in as the employer as it relates to benefits owed to that injured employee. In the event that a volunteer or board member is injured during the course of their duties, the association would treat this as a work-related injury, therefore requiring them to provide coverage. 

So what's the solution?

The solution is to purchase a workers' compensation “if any” policy.

Is it expensive?

No, the annual premium is about $800 to $1,100. 

If the injured “employee” files a workers' compensation claim against the association, will the workers’ comp policy cover the cost of litigation and lawyers’ fees?

The policy will provide defense costs and the cost of the settlement if it is a covered claim. Here are a few examples of claims that were paid out by our “if any” workers’ compensation carrier. There was a payout of $21,000 for an uninsured subcontractor who hurt his back while carrying drywall. There was a total payout of $10,000 for a volunteer who slipped on ice while doing work for the building. Another $11,000 was paid out for a board member who was pushing a dumpster and ended up hurting his back. All of these claims were covered by the “if any” workers’ compensation policy. We stress this importance of this type of policy to all our co-ops and condos that do not have employees on payroll. We try to protect our insureds as much as possible.