Up to what point will homeowners insurance cover day laborers?

zagyzebraNovember 3, 2011

Next year I will embark on a major restoration project and will hire licensed and bonded contractors for the most part. There are dozens of miscellaneous smaller jobs that I would like to hire day labors for. My concern with day laborers is the potential for accidents and being covered by my homeowners insurance.

Is there a point at which day laborers are NOT covered by insurance? Like, say, if they work more than X number of days or hours? Or, if they are illegal?

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You're in California? Not sure it applies equally in each state, but I think that you have to have Workers Comp insurance for them. You an contact your homeowners' insurance policy holder and ask, but I think that covers guests and other visitors to your home.

If a worker gets hurt, you could be in real trouble, from what I've read.

Here is a link that might be useful: Hiring Day Laborers

    Bookmark   November 3, 2011 at 8:23PM
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SUSHIPUP - Yup, I'm in Cali. I'm trying to get to the bottom of this right now. Seems like SO MANY PEOPLE here use day laborers. There are even nonprofits that match homeowners with laborers.

I've read that Berkeley Parents Network post over and over again. It doesn't really address my question.

I called the L.A. Department of Building and Safety, too, and they were predictably useless. They said either your homeowners insurance policy covers it or else you must have workers comp. My insurance agent is referring me to a claims adjuster, which seems ridiculous because I don't even have a claim.

So I'm just trying to get the skinny on this. Better to be prepared than sorry!

    Bookmark   November 3, 2011 at 9:12PM
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Your insurance agent would probably urge you to:
1 - Not hire uninsured workers
2 - Obtain an umbrella liability insurance policy to cover yourself for the possibility of claims that exceed your homeowner's policy limits
3 - Make sure your 'Licensed and Bonded' contractors have worker's compensation coverage for all of their employees that work on your property, including any day laborers they may use.

    Bookmark   November 3, 2011 at 9:22PM
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I don't think there are any shortcuts. The article I linked mentioned that some HO policies have riders that apply. And everyone with assets and property should have an umbrella policy.

So what do you do if a worker on your property manages to slice off his foot or falls from the roof?

If you have assets, hire a licensed contractor. Yeah, it'll cost more, but the potential for trouble is IMHO huge.

    Bookmark   November 3, 2011 at 9:50PM
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A couple million dollar umbrella policy would be cheap to take out for a year. You should do that no matter where you live and even if you think the contractors have their own insurance.

The rest is really state dependent. Some states have recently passed laws addressing day laborers and illegal immigrants. If you are concerned you may be hiring illegals, you should consult a lawyer in your state about your possible liability. Depending on where you live, you may very well have some local authorities who are just itching to make an example out of someone for skirting labor laws.

    Bookmark   November 4, 2011 at 8:28AM
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Thank you everyone, for your feedback. I found out this morning that day laborers -- legal or illegal, residential employees or not, are covered under my insurance policy for up to a million. And yes, Bill, I'm definitely getting the umbrella policy before embarking on this project, contractors or not.

In the state of California, day laborers are ubiquitous. Every time there's a natural disaster (flood, fire, earthquake), it's the day laborers who save the day and no one gives it a second thought. Their work ethic is generally unparalleled.

    Bookmark   November 4, 2011 at 5:50PM
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Keep in mind that your homeowners liability coverage is typically just that: LIABILITY coverage. That means there is coverage only if you could be considered negligent in some way for their injury. It's not just blanket coverage for any injury that may occur (like medical insurance or workers comp ( to a degree)): you have to be at fault.

Now, you might also have medical payments coverage on your policy. And that can kick in for medical bills (and possibly lost wages depending on the state and the policy) for a wider variety of injuries that occur on the property. But that is typically a smaller limit -- $1,000 or $5,000 -- has some exclusions, and the umbrella doesn't give you anything extra there.

As relates to the liability coverage, I wouldn't provide any tools for the day laborers to use. If they fall off "your" ladder or scaffolding, or get cut with "your" saw, it is easier to assign some fault to you for a problem with the ladder or blade, or missing warnings, or warnings not in Spanish, or whatever.

Check with an attorney in your state to make sure the above applies to you (NY has some funky labor laws, so California might, too). I just wanted you to know that your homeowners coverages aren't true substitutes for workers comp, which pays for all related medical, regardless of fault (some exceptions for fighting, etc.).

    Bookmark   November 4, 2011 at 9:29PM
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When we built our house we got a workman's comp type of insurance to cover anyone we hired to do work for us. But that was many years ago and I don't know if they still have it. It was not much, but it was thru the state of CA, not my insurance company. You might check this out. Being away from state so long, not sure who you would check with, maybe state of CA Workman's comp dept. Just call around.

    Bookmark   December 6, 2011 at 10:09PM
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