Home Owner Liabilities When Hiring Help
Do you hire the local teenager to cut your grass? Do you make use of a cleaning service? Perhaps you hire a landscaping company every year to keep your lawn and gardens in good shape. If you do, you could be setting yourself up for legal hassles, if you don't have the right insurance coverage. After an accident, you could be financially liable for an injury of any of these types of workers and your homeowner policy needs to cover you for that.
So, what do you need to do? First of all, determine if the person who is working in your home or on your property could be rightly considered an employee or a contractor. Generally, if you control how the work is done, the person is an employee. A nanny would be a great example. However, if the worker controls how the work is done, than this person is a contractor. Your lawn care guy or gal is likely a contractor.
These are highly simplified examples. If you have any question about whether someone is your employee or a contractor, you should consult with a tax professional. A tax professional will understand the differences and how they apply in your situation.
Now, if a person is rightly your employee, you'll have to check whether you need to carry workers compensation insurance coverage for them in your state. The rules vary on this. However, whether or not the state requires it, you may find it wise to get this coverage regardless. If your employee is injured, and you have worker compensation coverage, a claim would come under that policy. If you don't have the right coverage, the claim would fall on you directly. If this happens, your homeowner liability is not likely to pay benefit's. This is why worker compensation insurance is a good idea if you have employees and there is any chance they could be hurt on the job at your property.
When it comes to contractors, they should be covered by their own workers compensation insurance. As a result, any injury claims would be made under their own policy. However, if they have let their coverage lapse for any reason, you could then be held liable. Even though you might be able to sue the contractor for your losses, it's better to be safe than sorry. If you are hiring a contractor, ask for written proof of the following:
- Contractors license
- Workers compensation insurance
- General liability insurance
- Proof of coverage for any subcontractors working on your propert
Now, what about the teenager cutting your lawn? Do you need special insurance? In most cases, you won't. Check your policy that it contains limited coverage for minors performing lawn cutting or other small jobs on your property. If you don't have this provision, you might consider an additional rider to give you this coverage.
As well, you might consider additional liability coverage if you have people working on your property. If a liability judgement exceeds the amount of your coverage, you can be held responsible for those costs personally. An umbrella liability policy can be the answer. Such policies often have liability limit's of $1 Million or more. This can supplement your standard homeowner policy.