Insurance Carrier increasing prem for Release of Liability and Workman's compensation Coverage

Started by RichardA18 • 6 replies • 1177 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

⚡ Takes 30 seconds

Already a member? Log in

RichardA18 (Texas)
Posts: 1

Posted:

I am the past president of our HOA. With the aid of an attorney we developed a "Release of Liability and Workman's Compensation Coverage" form for independent contractors. This form was developed for independent contractors to perform work in our community that cost less than $1,000 to perform. Our insurance agent was made aware of this form an proceeded to increase of premiums considerable. He noted that our policy does not cover independent contractors. We discussed the release form and its relevance to Texas law, but he would not budge. Can an insurance company "hold hostage" an HOA for perusing independent contractors in lieu of bonded contractors? The HOA has limited fundsand independent contractors can small work in our community? Also, is there a way "around" this roadblock?

Richard J. Aligo

MarkM31 (Washington)
Posts: 351

Posted:

Quote:

Posted By RichardA18 on 05/07/2016 12:26 PM
I am the past president of our HOA. With the aid of an attorney we developed a "Release of Liability and Workman's Compensation Coverage" form for independent contractors. This form was developed for independent contractors to perform work in our community that cost less than $1,000 to perform. Our insurance agent was made aware of this form an proceeded to increase of premiums considerable. He noted that our policy does not cover independent contractors. We discussed the release form and its relevance to Texas law, but he would not budge. Can an insurance company "hold hostage" an HOA for perusing independent contractors in lieu of bonded contractors? The HOA has limited fundsand independent contractors can small work in our community? Also, is there a way "around" this roadblock?

You're not being held hostage, you are free to use other insurance companies and agents. Your present one thinks you are using a dodge to hire cheaper, non bonded contractors, possibly not fully covered by their insurance. Your lawyer disagrees. It is both of their rights to disagree.

And you are free to choose another company, agent, use only bonded contractors or do what ever you want.

You are not the victim here.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Richard,

Keep in mind that independent contractors and bonded contractors are not always different entities.

The insurance company will make premium adjustments based on the Boards decisions.

The bottom line is that there is more risk to the Association using a contractor who does not carry proper insurance then there is to an Association that insists all work be done by contractor who carry proper insurance. It doesn't matter that you had them sign a form releasing you from liability. A good attorney would still name the Association in the legal action and have you defend why you shouldn't be part of it.

NpS (Pennsylvania)
Posts: 4,216

Posted:

We have no employees.

But we carry worker's comp insurance anyway.

The issue is not only the contractor, but the contractor's subs. Even though we don't allow subbing in most of our contracts, it happens and we aren't informed. Doesn't matter what our contracts with the contractor say if a sub's employee is injured.

Not worth the risk. And it's relatively cheap.

Sikubali jukumu. Read all posts at your own risk.

MarkM31 (Washington)
Posts: 351

Posted:

Quote:

Posted By NpS on 05/08/2016 10:10 AM
We have no employees.

But we carry worker's comp insurance anyway.

The issue is not only the contractor, but the contractor's subs. Even though we don't allow subbing in most of our contracts, it happens and we aren't informed. Doesn't matter what our contracts with the contractor say if a sub's employee is injured.

Not worth the risk. And it's relatively cheap.

How can you not allow subs? What if your HOA's sparky needs to change a light standard, and doesn't own his own dump truck, mini ex and concrete line pump? What do you do then?

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By MarkM31 on 05/08/2016 10:21 AM

How can you not allow subs? What if your HOA's sparky needs to change a light standard, and doesn't own his own dump truck, mini ex and concrete line pump? What do you do then?

Actual wording says no subs without prior board authorization. In most but not all of our contracts.

Had the following experience.

Learned after the fact that painting company was primarily a marketing company and had very few painters on its own payroll. Their practice was to win the bid and then sub the contract out at 80% of the bid to whatever independent crew would buy it. Guaranteed the contractor 20% profit - and created huge problem for us with punch list items. Neither contractor nor sub-contractor wanted to absorb the cost of finishing the job properly.

Under the contract, the use of sub without prior authorization was a breach.

Our worker's comp insurance would have covered the risk of injury to any of the independent painting crew.

Sikubali jukumu. Read all posts at your own risk.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

As Tim said:

The bottom line is that there is more risk to the Association using a contractor who does not carry proper insurance then there is to an Association that insists all work be done by contractor who carry proper insurance. It doesn't matter that you had them sign a form releasing you from liability. A good attorney would still name the Association in the legal action and have you defend why you shouldn't be part of it.

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

✓ Ask follow-up questions
✓ Share your experience
✓ Get expert advice
✓ Access 350,000 discussions

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here