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Winter 2017  Volume 13, Number 4        
 

Does Homeowners Insurance Cover Domestic Workers?

Standard homeowners policies include medical payments coverage, which will pay the medical bills of someone injured on your property, regardless of negligence on the part of the homeowner. However, the policy will not pay if you are obligated to provide workers’ compensation.

Even if you are not obligated to provide workers’ compensation, the medical payments coverage under a homeowners policy has some serious limitations if you have in-home help. First, most homeowners policies limit medical payments coverage to $1,000 or $5,000. Workers’ compensation has no such limits. Second, you have a deductible. Third, without workers’ compensation, an injured worker can sue you for expenses that exceed the coverage, including lost wages and pain and suffering. By accepting workers’ compensation insurance payments, an injured employee accepts workers’ compensation as the “exclusive remedy” for his/her injury and (generally) loses the right to file a lawsuit.

Workers’ compensation policies also provide some “employers liability” coverage, which covers you if one of your injured worker’s family members sues you for loss of consortium, loss of services provided, or the like. (Although the policy provides some coverage, it might not be enough to protect you from a large lawsuit. We recommend having a personal umbrella liability policy, which will “kick in” once your workers’ compensation policy pays its employers liability limits.)

For this reason, we recommend that homeowners who hire in-home domestic help buy workers’ compensation, if it is available in your jurisdiction, unless your domestic help are independent contractors or paid by an agency. For more information, please call us.

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In this issue:

This Just In...

Five Lessons from Recent Hurricane Losses

Five Ways You Could Accidentally Lose Your Car Insurance

Do You Need Workers’ Compensation for Household Employees?

Does Homeowners Insurance Cover Domestic Workers?

 

 


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