What Does the Workers’ Comp Endorsement to the Homeowners Policy Cover?
[The following is a re-publication of a post that originally ran in 2011.]
Question from an IIABNY member: “I have a personal lines customer who called saying he has a person come to his house every other week and do five hours worth of cleaning. He wanted to confirm there is liability coverage should she be hurt. I called the insurance carrier, and the underwriter forwarded the attached Workers’ Comp endorsement, which to me is a bit confusing. Can you advise your understanding of this endorsement? I would assume if she were hurt on the premises and the insured was negligent (i.e., he allowed her to use a ladder that was defective and she fell), that his liability would respond. But what if she were hurt on the premises and he wasn’t negligent? Would the Workers’ Comp coverage kick in?”
Answer: This endorsement provides so little coverage that the New York Insurance Department won’t even let insurers charge for it anymore (they used to be able to charge $3). Essentially, it provides Workers’ Comp benefits to the insured’s employee (one with casual employment or regular employment of less than 40 hours per week) if that employee is subject to the New York Workers’ Comp Law. The question becomes, who fits the description of a covered person and also is subject to the Workers’ Comp Law? Almost no one:
Who Is Not Covered By The Workers’ Compensation Law?
The spouse and minor children (under 18 years old) of an employer who is a farmer as long as they are not under an express contract of hire (WCL §2 [4])…
People, including minors, doing yard work or casual chores in and about a one-family, owner-occupied residence or the premises of a nonprofit, noncommercial organization (WCL §2 [4]). Casual means occasionally, without regularity, without foresight, plan, or method. Coverage is required if the minor handles power-driven machinery, including a power lawnmower.
Essentially, the endorsement provides benefits if a kid using a power mower or snowblower gets hurt while working on the insured’s property. If he’s using a shovel, he’s not eligible for benefits; if he’s fired up the Toro, he is. Otherwise, the endorsement doesn’t cover most domestic employees because those employees are not covered by the law (“coverage does not apply to an employee who is not required, under New York Workers’ Compensation Law, to be covered”).
The Workers’ Comp Board’s website goes on to say:
Domestic workers include chauffeurs, nannies, home health aides, au pairs, nurses, baby-sitters, maids, cooks, housekeepers, laundry workers, butlers, companions, and gardeners working in a private household.
Domestic workers employed forty or more hours per week by the same employer (including full-time sitters or companions, and live-in maids) are required to be covered by a New York State workers’ compensation insurance policy.
Workers’ compensation insurance is NOT required IF the only people who work for the household are domestic workers in a private household who individually work less than 40 hours per week for that household and do not live on premises. However a person who employs household help for less than 40 hours per week are encouraged to obtain a voluntary workers’ compensation insurance policy to protect both the employer and the employee.
Please note that a homeowner’s insurance policy’s workers’ compensation insurance rider does not cover any domestic employees for workers’ compensation benefits.
Therefore, this endorsement will not cover the person cleaning your insured’s home. He can either rely on his liability coverage or voluntarily buy a Workers’ Comp policy to provide coverage.
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