Workers compensation insurance protects the domestic employee and the employer from the expenses and liabilities associated with a work-related accident. A single accident can leave the employer liable for thousands of dollars in medical bills. Don’t assume that this liability is covered under your Homeowner’s Insurance Policy!
Many states require household employers to carry Workers Compensation insurance for their employees. The legal requirements for obtaining this insurance vary widely from state to state, with wages paid or hours worked usually the defining item, not job description. Required or not, HWS strongly recommends all household employers purchase this insurance.
Workers compensation insurance is an insurance policy, not a tax, and must be managed by a state licensed insurance broker. Typically this insurance is available through commercial insurers. State insurance pools exist for those employers unable to obtain commercial coverage. These state pools are generally very expensive due to the higher risk levels present in the pool.
Workers compensation insurance will reimburse an employee who was injured on the job for medical expenses and lost wages. If you don’t have the insurance policy, you may be personally liable for your injured employee’s expenses. Perhaps more importantly, workers’ compensation insurance also affords you legal protection because when an employee accepts benefits she generally forfeits their right to sue you, the employer, regardless of fault.
Domestic employers should discuss their requirement for this insurance with their Property/Casualty agent. You may also need to update your automobile insurance if your domestic drives your personal vehicle.
Obtaining Workers’ Compensation Insurance: Commercial casualty insurers such as State Farm or Allstate are a good place to start. Bear in mind that they will generally require you to have other insurance such as homeowners, renters or automobile insurance with them to issue the workers’ compensation policy. Where the insurance is legally mandated, a state fund exists as the provider of last resort. This is typically the most expensive method of obtaining coverage, as the fund must insure all applicants, regardless of risk.
Our STATE SPECIFIC HOUSEHOLD EMPLOYER GUIDES provide information and links for Workers’ Compensation Insurance in that state.
Where Household Employers Need Workers’ Compensation Insurance
WORKERS’ COMPENSATION REQUIRED FOR FULL-TIME DOMESTIC EMPLOYEES: Colorado, Illinois, Kentucky, Michigan, New Jersey, New York, Utah, Washington
WORKERS’ COMPENSATION REQUIRED FOR FULL- AND PART-TIME DOMESTIC EMPLOYEES: Alaska, California, Connecticut, Delaware, District of Columbia, Hawaii, Iowa, Kansas, Maryland, Massachusetts, Minnesota, New Hampshire, Ohio, Oklahoma, South Dakota.
In other states, workers’ compensation is not required for household employers with a single domestic employee.
Talk to your insurance company!
We strongly recommend that you discuss your situation and your state’s insurance regulations with a licensed insurance agent. HomeWork Solutions’ household payroll professionals are not qualified to discuss specific insurance issues. We are happy to make referrals to clients to insurance professionals.
» HomeWorkSolutions.com Blog: Real Life Example
» US Department of Health & Human Services:Worker’s Compensation in the Consumer Market
» US Department of Labor Survey of Worker’s Compensation rules as they apply to domestic service.
» US Department of Labor maintains a list of the state agencies responsible for administering state worker’s compensation sytems.
Last Update: December 2011