Authors: Phil Masi Negar Sharifi
If you manage a homeowner or condo association, you know how quickly the event calendar fills. From fitness classes and swimming lessons to holiday gatherings and social events, these experiences help build connections and create a strong sense of community.
However, HOA vendor events can also introduce additional liability considerations. Bringing third-party vendors onto the property or allowing access to individuals who are not residents can increase liability exposure in ways that are often underestimated. Understanding how vendor-led activities can affect the association's liability profile can help boards make more informed decisions.
Considering outside vendors on your property
Outside vendors such as instructors, trainers, or entertainers can enhance the resident experience. In the right structure, they add value and support engagement.
Additional considerations arise when vendors are allowed to operate independently or open their services to the general public. At that point, your property may begin to function more like a public venue than a private residential community.
When non-residents are invited onto the property, the association may take on additional liability considerations. Some HOA and condominium insurance programs may contemplate limited public access differently than resident-focused activities, making it important to review plans with your insurance advisor. Carriers often ask whether amenities are open beyond residents and their guests, and the answer plays a role in both coverage and underwriting.
Keeping programming focused on residents and their guests can help maintain a risk profile that aligns with many community association insurance programs.
A common scenario: Pool use by outside instructors
One frequent request involves swimming instructors asking to use community pools for lessons while bringing in their own clients.
While this may appear to generate easy revenue, it is important to consider the broader risk profile. Individuals with no connection to the community are being granted access to a high-risk area. The association typically has no visibility into who is on-site or their level of supervision.
If an incident occurs, the association may become involved in resolving liability questions despite the relatively limited revenue generated by the arrangement. In many cases, that fee would not begin to offset the cost of defense or potential damages.
There is a clear distinction between engaging a vendor to provide services exclusively for residents and allowing that vendor to operate a business on the property. The latter may materially change the association's liability profile and insurance considerations.
What to evaluate before approving a vendor
A thoughtful review process can help reduce risk while still allowing valuable programming.
Vendors should have appropriate credentials for the services they provide, especially when working with children or in higher-risk environments such as pools or fitness areas. They should also carry their own liability insurance, with coverage limits that align with the exposure they bring. A certificate of insurance should be reviewed carefully to confirm coverage is active and appropriate.
Written agreements are equally important. Indemnification provisions help clarify responsibility and protect the association if the vendor's actions lead to a loss.
Finally, access should remain limited to residents and, where appropriate, their guests. Expanding beyond that group changes the exposure profile in a meaningful way.
A closer look at event risk
Even well-planned community events can benefit from a thoughtful review of safety and liability considerations.
Consider a scenario where volunteers host an evening childcare event at the pool. Activities may include food, games and supervised swimming. While the goal is to provide a valued service to families, several operational and safety considerations may arise.
Many community pools are not approved for nighttime use without specific lighting and safety measures. Supervising multiple age groups in or around water requires training and structure. Associations may need to consider whether volunteers have the training, screening and support appropriate for the activities being offered. Food-related risks, such as allergies, add another layer of exposure.
Situations like this highlight the importance of pairing community programming with appropriate planning, oversight and safety measures.
Balancing community experience and risk management
Community events play an important role in creating a place where residents feel connected and engaged. At the same time, associations have a responsibility to protect those residents and the assets they share.
When evaluating HOA vendor events, a few consistent principles can help guide decisions. Keep programming focused on residents, confirm vendors have appropriate insurance and credentials, and involve your insurance advisor early in the process.
Clear boundaries and proactive risk management can help you deliver meaningful experiences while protecting the long-term health of your community.
Gallagher can help you evaluate vendor requirements, review liability considerations and assess whether your insurance program aligns with how your community operates. Connect with our team for guidance on supporting engaging resident experiences while maintaining sound risk management practices.
