Although most Directors and Officers (D&O Insurance) policies protect committee members who might be sued for negligence, they do not cover injuries sustained by committee members. D&O policies normally contain an exclusion for bodily injury so they do not duplicate the bodily injury coverage in the association's underlying general liability policy.
There are at least three other avenues where the committee member's injury could be covered under the association's insurance: (i) guest medical, (ii) commercial general liability, and (iii) workers' compensation.
Guest Medical Payments. If the association has "Guest Medical Payments" coverage, it covers injuries in the common areas “regardless of fault.” The committee member would not have to prove the association was negligent in order to have his medical expenses considered. However, coverage is typically low ($5,000 per person) and the policy would not cover injuries that occur on the premises the “person normally occupies.” If the slip and fall occurred on the walkway leading to his unit or a portion of the Common Area the owner frequently used (parking garage, swimming pool, tennis court, etc.), the carrier might deny coverage. strong>
Commercial General Liability. If the association does not have "guest medical" or the injuries exceed limits, the claim could be covered under the CGL policy. If the association's negligent maintenance of the premises caused the injury, the medical expenses should be covered.
Specially Endorsed Workers’ Compensation. If a board member or committee member is injured while carrying out his/her duties, most insurance carriers will not cover the injuries because volunteers are not considered employees under Labor Code §3352(i).
Any person performing voluntary service for a public agency or a private, nonprofit organization who receives no remuneration for the services other than meals, transportation, lodging or reimbursement for incidental expenses" is excluded from the definition of "employee."
A small number of workers’ compensation insurance carriers have begun issuing policies with an endorsement that broadens the definition of “employee” to include the board of directors, officers and “appointed committee members.” If an association has this coverage, the committee member is covered if he was acting on behalf of the association in his "official capacity" at the time of injury. As a prerequisite to coverage, the board's minutes must clearly reflect the appointment of the person to a committee. Boards should check with their insurance broker and, if available, extend coverage to volunteers.
Other Ways to Reduce Risk.
1. Hold Harmless Agreement. Boards can require volunteers to sign a hold harmless agreement releasing the association from liability in the event the volunteer is injured. However, this may discourage volunteers if they have no protection in the event of an injury.
2. Safety. Another way to reduce risk is to make sure volunteers have safe working conditions. This means no faulty ladders or damaged tools. Another is to only allow low risk tasks (clerical work, picking up trash, sweeping sidewalks, planting flowers, etc). Boards should avoid high risk tasks--anything involving heights (cleaning gutters, replacing roof tiles) or power tools (chain saws, lawn mowers, and so on).
Recommendation: Boards should have their association's insurance reviewed by an agent who specializes in homeowners associations. Insurance coverage is too important to leave to inexperienced agents.
ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.