WORKMEN'S COMP FOR LANDSCAPERS

A "COMPANY" that does tree trimming (with chainsaws?!) that doesn't carry insurance?

You open yourself and each homeowner to huge liability for not contacting with a licensed, insured company.

Just because companies under 4 employees are not required by law to have worker's comp shouldn't mean you can't find contractors that are fully insured. Just make sure to make that a requirement of any contract.

We have no employees, but we have workers comp insurance just in case one of our contractors OR their subs don't have coverage. Cost is cheap when you put down 0 employees on the form.

Hi Sue.
Thanks for your reply.
The community lawn maintenance company only trims short and tall hedges, and small trees up to 20 feet, yet the owner does not carry Workmens Comp. They don't necessarily use chainsaws .This is the problem .
We have a separate tree trimming company for the very tall trees, and they are insured and bonded. Sorry if I was not clear.

They are YOUR sub contractor for labor relations purposes.

Their employees are working on YOUR property at YOUR (albeit conveyed through their direct employer) behalf.

YOU will be the ultimate payor of any workman's comp claim if their employer can not pay.

Their employer is simply not required to purchase insurance, not off the hook for any claims.

YOU are the (knowing) employer of the employer.

? Don't believe me ?

! Ask the corporate attorney !

In CA, Landscaping and Tree Service are 2 distinct and separate licenses and skill sets. Landscape can do tree work up to 15' above grade; the max. extension of a Silky or Stihl pole saw. Above 15' requires separate talent and equipment; leg spikes, ropes, chainsaws, chippers, and specialized first aid & rescue.

In CA, an HOA that hires a contractor w/o WC insurances becomes a presumptive Employer. And that means taking on all financial liability and responsibility for their new Employee, Mr Contractor. There is a highly abused exemption in CA licensing law requirements that allows a contractor to claim Sole Proprietorship (meaning: no employees; a one-man-band) and that allows being excused from WC insurance requirement. (The only exception is roofing contractors.)

The fallback protection for an HOA ignorant enough to hire unlicensed and/or uninsured talent is to carry their own WC policy, typically $1M minimum. Also, typically, the HOA General Liability policy does NOT cover or substitute for WC insurance. The same applies to Directors and Officers Liability policies. And that's because in at least CA, WC insurance is a No Fault System.

Now if your HOA does NOT currently have a WC policy, and hires an unlicensed and or uninsured contractor, and he or his employees suffers injury, disability, or the worst of the God Forbids - death, then the HOA is open to a Personal Injury lawsuit and criminal charges against the HOA. Possibly, your Reserves Account balance is wide open to claims and torts.

What's unclear in your situation, is Maintenance responsibilities on: Private property, Common Area, and Exclusive Use Common Area. Asking homeowners to assume maintenance responsibility on Common Area items sounds very dangerous (and weird).

My humble opinion is that the items below ought to be in any HOA Bylaws:
*Never ever allow a Board to hire unlicensed and/or uninsured (WC & Contractor General Liability) contractors. Track expiration dates for licenses, bonding, and WC insurance.
*Never allow a Board to issue a Maintenance or Services contract w/o an indemnity clause for HOA liability.
*Never allow a Board to skate on carrying WC insurance.
*Never allow a Board to skate on obtaining local Building Permits, as locally required.

Yes, I think you are rational and have some well-founded worries. Due diligence is required on your State contractor licensing and insurance codes, State labor codes, and your HOA insurance policies in place. Also the Liability portion of your own homeowners insurance policy and health insurance limitations.

Thanks again to all who responded with their thoughts and suggestions which are appreciated.

I just received a response from my own company attorneys who echoed many of you in having all suppliers have adequate insurance including WC.

Their letter was forwarded to the rest of my board as well as the HOA's attorney, who agreed. If this particular contractor does not want to take out such insurance we will find one who is fully covered.

Thanks.!