Even if an association has no employees, it can still have workers compensation liability exposure. The Court of Appeals held that an association and its managing agent were both liable to pay workers compensation benefits to an injured worker employed by an uninsured and unlicensed contractor.

Background. The Montana Villas Homeowners Association retained Pegasus Properties as its management company. Pegasus hired Hruby, an unlicensed and uninsured contractor, to install rain gutters on the Association's common areas. Hruby's employee was sent out to perform the installation work. On the first day of the job, a rain gutter touched a high voltage electrical wire, severely injuring the employee.

Decision. Since Hruby was an unlicensed and uninsured contractor performing work for the Association, the court concluded that both the Association and its management company were the employers of the injured worker, and both were liable to pay him workers compensation benefits. Heiman v. Workers Comp Appeals Bd.

RECOMMENDATION: Associations and their managers should verify that all of their contractors are properly licensed and insured.