Do we need Worker's Comp?

By Buddy Whitaker 

Published December 19, 2012

Most condominium associations don't have any employees due to management contracts that are in place. They are also not bound to the state of Georgia worker's comp statutes since they don't have any employees. Worker's compensation is not a requirement under the Georgia Condominium Act either. However, just because you are not legally obligated to carry this coverage doesn't mean that there is not an exposure to a worker's compensation type loss.

Condominium and homeowner associations require many vendors to take care of the many tasks required to function. Many of these vendors perform tasks on the association's premises and provide a certificate of insurance to show proof that they have insurance in place. What if the vendor didn't pay their bill last month? An insurance certificate may not reflect a cancelled policy. Nor will it show a policy that has cancelled during the course of a project. One of the ways to verify coverage is to call and ask, but not many do this due to time restraints.

What about the service men and women that perform work for a unit owner? "The association isn't responsible for any liability that may occur in a unit", is a common objective I hear. However, this will not prevent a unit owner's contractor from filling suit against the unit owner and the association. Who's verifying the contractor's insurance in this scenario? I bet the unit owners are not even though they probably should. The cost to defend the association could be well beyond the cost to settle the claim on a worker's compensation policy. The worker's comp company will also perform their due diligence to make sure the claim is valid.

There is also a third and indirect benefit to carrying a worker's compensation policy. Insurance companies typically review what is known as a loss history. This report provides details on the severity and types of losses sustained by a company. Property and general liability loss history commonly goes hand in hand because these two lines of coverage are written by the same company in most cases. So if a claim can be paid by a worker's compensation policy rather than a general liability policy, this will help your association's premiums and renewability.

For roughly $1,300 annually it makes great sense to me. It's a great safety net and helps curb losses that would show up on other policies. Not to mention 1099's. However, this is a topic for another discussion.

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Buddy Whitaker truly enjoys being an insurance professional. His condominium association client's appreciate his attention to detail. The fact that he has practically

committed the Georgia Condominium Act to memory helps. 

In his words, "My objective is to be the resource and trusted advisor that my clients want to turn to for guidance. I strive to either know the answer or know where to find it."

Creative Solutions: As a student of condo association (COA) insurance, Buddy has forged specialized programs that address the unique exposures of multi-family residential structures.

His solutions juggle the need to keep overall costs down, both for the unit owner and the association, while making sure that coverage remains as broad as possible.

COA Focused: He's leveraged his 6 years in the insurance industry; as the director of continuing education for Metro Alliance of Independent Insurance Agents, board position on his own condo association, and study of the Georgia Condo Act and condo declarations.  This transitioned into understanding of the COA sector, the nature of the claims,  methods of managing the risk, and the complex relationships among board members, unit owners, and property managers.

Insurance isn't just a job for Buddy, it is a passion.  That said, he also enjoys a round of golf, experimenting in the kitchen, and DIY projects around his home. He's also a loving husband and a proud father of a brand new baby girl.

Contact Buddy via email or visit Hamby & Aloisio’s website.