Homeowners Insurance Exclusions – Workers Compensation

If you’re doing an addition to your home, making repairs, or doing any type of work on your home for hired outside contractors, one thing that’s missing from your standard homeowners policy is workers’ compensation. Most larger contractors carry workers’ compensation insurance for their employees, but if you hire a smaller company or even an individual handyman to do some work on your home and they don’t, you could be responsible if someone is injured while working on your home.

There is additional coverage you can buy if the workers you hire are uninsured. It’s called contingent workers’ compensation. If you have this homeowners coverage option, you will not be liable if uninsured workers are injured while working on your property. Instead, the insurance company will cover the medical expenses and lost wages faced by the worker. If you don’t have the coverage, you would be legally responsible for paying whatever a workers’ compensation insurance provider would cover.

So who should buy this additional policy? Anyone who has a decent amount of money and/or home equity and is hiring uninsured workers to work on their property. If you are in a bad financial situation, this coverage may not be necessary because you can only be sued for what you can afford. This, of course, is open to all kinds of interpretation, so if in doubt, buy the hedge. It’s not that expensive and can save you tons if something were to happen.