If you employ someone in your home on a regular basis and that person gets injured on your property, your homeowners insurance may not cover medical bills and related expenses. You may be required to purchase worker’s compensation insurance and unemployment insurance if you employ a domestic worker.
What Type of Domestic Worker Is Considered an Employee?
The definitions of “employee” and “employer” differ from state to state. How you and your household worker are classified will determine your insurance needs.
A nanny, housekeeper, gardener, in-home caregiver or someone else who works for you in your home on a regular basis may be classified as an employee, and you may be considered that person’s employer. If you hire a domestic worker through an agency, the agency will generally be considered the worker’s employer. If you hire someone to work for you occasionally, such as a babysitter, that person won’t be considered an employee.
What Types of Insurance Are You Required to Have?
If the person who works for you is classified as an employee and not an independent contractor, you, as the employer, may be required to purchase worker’s compensation insurance. Some states only require worker’s compensation insurance for employers that have a minimum number of employees, while requirements in other states are based on different criteria, such as the number of hours an employee works.
If you are required to have worker’s compensation insurance and you don’t, and your household worker gets injured, you can be held personally liable and sued. You may be able to obtain a worker’s compensation insurance endorsement through your homeowners insurance company.
If you hired the domestic worker through an agency and the agency is considered the worker’s employer, the agency may provide worker’s compensation insurance. Ask the agency to provide proof of coverage.
You may be required to pay for state unemployment insurance. That will provide monetary benefits to the domestic worker for a period of time if the employment relationship ends through no fault of the employee.
Why Might Your Homeowners Insurance Not Be Enough?
If someone who works in your home occasionally, such as a babysitter, gets injured on your property, related expenses will fall under your homeowners insurance policy. If a domestic worker who is considered an employee gets hurt on your property, however, your homeowners insurance won’t cover medical bills if the injured employee is required to be covered under worker’s compensation insurance.
Do You Have the Insurance Coverage You Need?
If you have one or more people who work for you in your home, you may be underinsured. That can put you at grave financial risk if a domestic worker gets injured on your property and sues you. Research the laws in your state and discuss your situation and coverage needs with your insurance agent.
