As a leader in the community management industry, we are constantly striving to find ways to serve our clients more effectively. We know that maintaining your Association through the management of multiple vendors is critical to that service. We have a duty to our clients to ensure that we do everything within our power to look out for their best interest. This includes ensuring that all vendors who provide service for AZCMS’ clients meet predetermined requirements (especially adequate insurance and licensing).
AZCMS contracts with Enterprise Risk Control (ERC) to automate our vendor credentialing process. ERC is a company dedicated to managing vendor requirements, including credentialing vendors and reviewing documents such as insurance certificates, licenses, and W-9s. By leveraging ERC’s platform, we are able to provide greater financial security to your Association by minimizing your risk and liability.
Using ERC’s vendor portal platform, we are able to provide greater financial security to your Association by minimizing your risk and liability. The automated vendor portal and intuitive online registration process will streamline vendor interactions, allowing vendors and AZCMS to centrally and expediently track all important documentation, including proof of insurance and W-9s.
Unlicensed vendors are rarely bonded or properly insured. This increases the HOA’s risk exposure, therefore opening up the HOA to a severe financial risk in the event of property damage or injury. For example, when you hire an unlicensed general contractor, the general contractor and their insurance carriers are the primary payers in the event something goes awry on the job. If that general contractor is not licensed and insured to handle the project, the HOA is a general contractor!
If an unlicensed contractor breaks a sewer line, the HOA is responsible. If a worker gets hurt and can’t work for two years, and there’s no workers compensation coverage in place, the HOA is on the hook for that worker’s medical bills and lost wages.
An HOA that hires an unlicensed or uninsured vendor also subjects itself to potential liability for unpaid wage or worker’s compensation claims brought by the vendors’ employees.
The issue of lapsed coverage is also important here because there are many instances of vendors canceling their policies during the coverage year with no notification provided to the HOA. Studies have shown that over 45% of vendors have had a lapse in one or more of their policies in the past two years.
Hiring vendors with questionable financial practices (bankruptcies, liens, and judgments) can also place the HOA in the precarious position should the vendor not be able to complete the job due to lack of capital or simply walks away from the job after receiving the first payment.