Will a Homeowners Policy Cover Injured Contractors?
It all depends on the policy and state law
Homeowners will sometimes hire a person to do work at their home, such as housekeeping, painting, 
landscaping, etc. on a full-time, part-time or one-time basis. If the employee or independent contractor is injured or injures another person, coverage could be provided under the Homeowners Liability or Workers’ Compensation policy. This depends on the availability of each policy and state Workers’ Compensation laws.
Although coverage may exist under a Homeowners Policy for injuries to such workers, there are advantages of having a Worker’s Compensation policy:
- State Workers’ Compensation statutes may require Workers’ Compensation benefits to be offered
- Coverage on a Homeowners policy is limited to the policy limits, which could be insufficient if there were serious injuries, permanent disabilities, or even death.
- Workers’ Compensation Policy offers broader protection, such as disability payments, and possibly unlimited medical expenses.
If the state does not require Workers Compensation coverage or it is not provided on a voluntary basis, the Homeowners policy could apply to either cover lawsuits filed by injured workers or to pay for medical expenses if no lawsuit is filed. However, there are three important provisions to be aware of in the Homeowners policy:
- The injured worker must fall under the definition of residence employee for there to be coverage. A residence employee is a) an employee of an insured, or an employee leased to an insured by a labor-leasing firm whose duties are related to the maintenance or use of the residence premises or b) one who performs similar duties elsewhere not related to the business of an insured.
- The Liability employment exclusion for for bodily injury coverage to any person eligible to receive any benefits voluntarily provided or required to be provided by an insured under any of the following:
- Workers’ Compensation law
- Non-occupational disability law
- Occupational disease law
The above exclusion means that there will be no liability coverage for suits by the employees or contractors against the homeowner if the insured homeowner voluntarily offers or is required by law to provide Workers’ Compensation benefits. However, if the homeowner does not provide Workers’ Compensation benefits or the law does not apply, liability coverage under the Homeowners policy would be available. The Homeowners policy would also most likely respond to the homeowner being sued by a third party injured by the employee/contractor. However the employee/contractor would not be eligible to receive coverage for claims brought against him/her by third parties,due to the employee/contractor not being an insured for liability coverage.
The medical payments exclusion for payments to any person eligible to receive benefits voluntarily provided or required to be provided under any:
- Workers’ Compensation law
- Non-occupational disability law
- Occupational disease law;
This exclusion states that there will be no medical payments coverage for an injury to the employee/contractor if they are eligible to receive benefits voluntarily provided or required under law. This is true even if the employee/contractor is eligible for Workers’ Compensation benefits from any source, including if Workers’ Compensation was required by law but was not provided. A social security lawyer should be contacted for assistance in handling any type of workers compensation situation.
Although some coverage is provided through a Homeowners policy, and an Umbrella policy is warranted to help increase limits, a Workers’ Compensation policy provides a broader form of coverage, and would be most advisable, especially if the person hired could be considered an employee.