If your HOA is in the market for hiring a new contractor, there is a lot at stake to consider. First, it’s important to note that the HOA absorbs liability outward from the contractor that includes insurance companies, management and finance companies. While each of these other parties wants to mitigate liability as much as possible, hiring a contractor is a big commitment for an HOA. Therefore, heed the following advice to ensure the hiring process goes smoothly and protect your operation with an LA HOA Insurance program.
To mitigate financial responsibility on behalf of the contractor, ensure they carry liability insurance, surety bond, workers’ compensation, state and business licenses, and permits. At the very least, this will shift burden from the HOA to the contractor immediately. HOA’s commonly fail to check to ensure the contractor’s qualifications match the minimum requirements, so don’t miss this crucial misstep.
Next, focus on more than just price and quality. By using a job specification to acquire bids, boards and managers can usually identify the best price, and the specification sets workmanship and material quality standards. But some HOA boards and managers believe that using a specification during the bid process guarantees that the HOA will avoid a negligence lawsuit. It won’t. Further, the article stresses that your challenge is to find quality work while avoiding opportunities for problems. In your search, “quality” shouldn’t apply only to materials and craftsmanship: it should apply to the contractor’s standards. This may sound difficult, because the most qualified bid may not always offer the best price, and finding the most qualified contractor sounds like it will take a lot of legwork, says Echo.
The following policies should be carried by your contractor:
Employment background check- This ensure the contractor employs credible and experienced workers that won’t pose additional threats to your association.
Security and theft prevention policy- Does the contractor have policies and procedures that protect sensitive customer information, including where that information is stored, how it is secured, and who may access the information? Do they use video and audio security cameras in the contractor’s office and warehouse? Contractors should also respond to breaches in security by checking for suspicious identity information on employment applications, document inconsistencies, breaches of computer access, alerts from third sources, etc, states the article.
Complaint resolution policy- There should be a formal document that allows complaints to be filed and resolved amicably and professionally.
About Scott Litman Insurance Agency
At Scott Litman Insurance Agency, we are dedicated to protecting HOA’s like yours. We have a unique understanding of the industry and the common risk exposures that you face in your daily operations. In fact, we find that 90% of the policies we review are missing coverages that violate the Covenants, Conditions, and Restrictions (CC&R), exposing the board, HOA and management to lawsuits– which is why our comprehensive policies are tailored to meet your specific needs at competitive prices. For more information about our products, contact our experts today at (855) 999-4505, or fill out our online form.