Although some homeowners know they are liable for injuries to guests that occur on their property, they may not be aware that they are also liable for injuries sustained by hired workers. Gardeners, housekeepers, nannies and other workers who come on the property can file a claim if they are injured. Before hiring a home worker, there are several important issues to consider.
Contractors Vs. Employees
When there is new help, it is important to figure out whether these individuals are contractors or employees. This will determine whether a homeowner is liable for an injury. Whether a worker is an employee or contractor depends on how much control the homeowner has over that individual. If a homeowner hires a person as a nanny to care for children and clean the home by following specific instructions and he or she also provides supplies, this means the homeowner has some form of control over the nanny. In such a case, the nanny would be considered an employee. However, if a homeowner hires a gardener who provides services to the public to mow the grass and trim the shrubs but the gardener uses his own equipment, that individual would not be considered an employee. The same is true if the gardener has his own team of workers. In such a case, he would be classified as an independent contractor. Both of these scenarios paint simple examples, but homeowners who are uncertain about hired workers should discuss their concerns with an agent.
Workers’ Compensation Insurance
In some states, homeowners who have employees are required to carry workers’ comp coverage for them. It is still worth considering whether a state requires it or not. If an employee is injured on the property, the homeowner will have to pick up the tab for medical expenses without this coverage. However, workers’ comp insurance covers these costs. Independent contractors such as carpenters, plumbers and landscapers should be covered by their own employers’ insurance. When contractors are injured performing work on a property, their expenses will be paid under their own employers’ insurance. However, homeowners may be held partially liable if the contractor does not have adequate coverage. If this happens, some homeowners may be able to file a lawsuit against such contractors if they are required by law to have sufficient coverage. When considering hiring a contractor, homeowners should make sure they have coverage for property damage, worker injuries and uninstalled materials. Always ask contractors for proof of a license and workers’ compensation insurance for any other workers as well as themselves. They should be able to provide proof of a general liability policy.
Understanding What Home Insurance Covers
Home insurance policies vary when it comes to covering workers. A policy may include limited coverage for workers mowing lawns or performing other tasks requiring power tool use. However, a policy may exclude domestic workers such as maids and nannies. Some policies may only cover injuries if a lawsuit is filed against the policyholder. There are different types of policies, so it is important to understand the inclusions before purchasing one if hired workers will be needed. You may also be able to add this to endorse this coverage to your homeowners policy, but this is not automatically covered for most situations.
Umbrella Policies
If a policy has limited or no liability coverage for home workers, it is possible to buy additional liability insurance. There may be some coverage available through a homeowners policy, but it is likely inadequate in comparison with a major lawsuit. If a lawsuit were filed, a homeowner could count on losing up to hundreds of thousands of dollars without insurance. Umbrella policies provide further protection. They offer higher levels of liability insurance and ensure families remain protected in the event someone sues. These policies are normally offered in increments of millions, and they can be purchased after an attachment point is met through home or auto coverage. These points are usually between $250,000 and $500,000. Before hiring any home worker, it is important to check with the Better Business Bureau to see if prospective workers have had any complaints filed against them.
If you have any questions or concerns, please call ACBI at 203-259-7580 or visit our website.
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