You may have received notice about a new state law regarding workers’ compensation insurance. Before you get confused, or even worse, “waive” coverage for directors and officers, SLIA has done research on the law’s effect on HOA’s.
Here is how the law applies to HOA’s. As HOA board members are volunteers, here is how to manage the new CA state law.
- If the HOA is “Not for Profit/Association,” then they are exempt from the new requirements. Therefore, managers need to make sure the HOA is classified as either a “Not for Profit” or “Association”. If the HOA is mistakenly classified as a Corporation and not corrected, the premium could be increased and not allowed to be retroactively credited once the mistake is discovered.
- Along with the notification letter, Directors and Officers are asked to sign a “waiver” of coverage. However, property managers need ensure that these Officers do not sign the waiver as doing so could remove coverage for the Volunteer Officer coverage that they are entitled to under the “No Payroll” policy written for the HOA.
According to Insurance Journal, AB 2883 provides that all business workers’ comp insurance policies, including in-force policies, will be required to cover certain officers and directors of private corporations and working members of partnerships and limited liability companies that may have been previously excluded from coverage beginning on Jan. 1, 2017.
It’s imperative for your HOA to get in contact with a trusted insurance agent. At Scott Litman Insurance Agency, we are the insurance experts. To ensure each facet of your operation is securely protected, especially with new regulations coming into play early next year, contact us today at (855) 999-4505, or fill out our online form. Be sure to “Like” us on Facebook for more information, events, and promotions, as well.