One way many homeowners and condo associations are trying to save money in these tight economic times is to have owners in the community volunteer to perform services that the HOA would otherwise pay someone to do. Often these are jobs like gardening and other types of grounds maintenance like shovelling snow. (Luckily shoveling snow is a non-issue in my part of California!)

So what kind of insurance should your HOA have if you plan to do this?

And how much will it cost?

"Every association should obtain what's called a minimum premium workers' compensation policy," advises Bob Tankel, principal at Robert L. Tankel P.A. in Dunedin, Fla. "That means the association is representing that it has no employees that need coverage, but in the event volunteers are injured, they'll have workers' compensation to cover the injury and any allegations of a loss of income."

Is that a reasonable expense for struggling associations? "You need to make a business decision whether the cost of the policy--about $1,200 a year--is cheaper than three hours of a lawyer's time or the first five hours of defending a lawsuit,"

says Tankel. "That's a business decision. If you're going to save money in one way, you need to get protection in another."

Read more about how you can mitigate risks to your HOA if you plan to use volunteer help.

Best regards,
Matt Humphrey
President