Many homeowners employ workers to take care of the home, grounds and children while they are off to work. Hiring a domestic worker is not quite the same as being a business owner with a team of employees, but having a domestic staff comes with increased liability, and you and your domestic workers should have some insurance coverage, particularly if they become injured or ill while under your employment.
In these cases, the best policy is a personal Domestic Workers’ Compensation insurance policy. This policy for domestic employees will help with their medical bills, lost income and getting back to work.
Depending on the state, there are different laws mandating workers’ compensation insurance requirements. For example, in New York, any domestic worker employed (other than those employed on a farm) by the same employer for a minimum of 40 hours per week must have workers’ comp insurance.
An insurer should review the requirements with you based on where you reside, the size of your staff and the number of hours they work under your employ to secure a policy that addresses your needs. Your employees must be classified properly.
It’s important to understand that under workers’ comp laws, you are liable for injuries to your employees, regardless of whether or not you were at fault.
Most states require people to buy workers’ compensation insurance for all their domestic employees. Domestic workers can be nannies, housekeepers and maids, but could also encompass home health nurses, some gardeners and more. The legal definition of “employee” is not set and varies from state to state. Clues that someone may be considered an employee are if you tell them how, when and where to do the work, you have a contract with them, or if they work for you on a continuing basis rather than just one time.
In states that require you to buy workers’ compensation coverage for your domestic employees, those employees will not be covered by your homeowners or umbrella liability policies, as they contain specific exclusions. Many people with nannies and other domestic employees don’t realize they have a large gap in coverage, which can leave you personally liable for millions of dollars in medical bills for an injured employee.
Worker’s comp awards can be astronomical. Even if your state does not require you to buy workers’ comp, you may want to do so. Workers’ compensation insurance has virtually no limits, whereas homeowners and umbrella liability policies do.
Regardless of how you go about it, obtaining proper coverage for domestic employees is the right thing to do for you and for them. After all, many nannies or housekeepers become like part of our families and we should help protect them.
About The Rubin Group
Based in New York, The Rubin Group provides insurance in most of the 50 states. Our full-service insurance brokerage provides insurance and risk management services to individuals in all income brackets and businesses of all sizes and types. We understand that every client has unique coverage requirements, and we are passionate about providing the ideal individualized coverage for each customer. Each member of our team takes the time to truly understand your situation, the particular risks you anticipate – and the very real risks you’ve not yet contemplated. For all of your insurance needs, contact us at The Rubin Group!