Here are a few suggestions:
“Certificate of Insurance”
Inform your client to request a “Certificate of Insurance” from your competitor listing:
a. Professional Liability
b. General Liability
c. Non-Owned Auto
d. Fidelity Bond (for employee theft)
e. Workers Compensation
It is important to inform your client that if the worker (who is probably considered an independent contractor by their employer) is responsible for any bodily injury or property damage, or becomes injured on the job that your client may be responsible for the damages, since they could be determined to be the employer.
Homeowners Policy & Workers Compensation
I have heard that some companies tell their clients that their homeowners policy will provide workers’ compensation coverage for their caregiver. While policy language differs, generally the following will apply to most homeowners policies:
By statute, any insurance policy that provides comprehensive personal liability insurance must also provide workers’ compensation coverage for injuries suffered by “residential employees” injured in the course of their employment by the homeowner.
Who is a “Residential Employee”
- Persons whose duties are incidental to the ownership, maintenance, or use of the home (e.g., household domestics, part-time gardeners).
- Persons providing child care and supervision.
- Persons whose duties are personal, and do not pertain to the owner’ occupation, profession, business, or trade.
- This includes persons whom the homeowner hires to make repairs on the premises, such as a plumber or a carpenter. Furtado v. Schriefer (1991) 228 Cal.App.3d 1608.
- This may include a family member (who would otherwise be excluded) who is also an employee (e.g., older child providing babysitting services for a sibling, for pay)
Who is NOT a Residential Employee:
- Persons employed in the construction of a home before construction completion.
- A person providing solely adult care. While the statute expressly provides that care-givers for children are residential employees, persons providing care of an elderly or infirm household resident is not a residential employee. McCallister v. WCAB (1976) 61 Cal.App.3d 524.
- A “casual residence employee.” This is someone who:
Was employed for less than 52 hours during the preceding 90 days or
Earned less than $100 during the preceding 90 days.
The insurance only applies if the injury was suffered during the course of employment – this means that the injury was sustained while the employee was engaged in the work he or she had been hired to perform.
The Homeowner Policy workers’ compensation coverage does not apply to independent contractors. Whether a person is or will be considered a residential employee or an independent contractor heavily depends on a number of factors, and must be considered on a case-by-case basis.
So, if your competitor is telling your client that workers compensation coverage for the worker is provided for under the client’s homeowner’s policy, advise your client to notify, in writing, his or her agent that a caregiver will be in the home, providing care to an adult, and indicate how many hours the caregiver will work. Have your client request a statement from the agent, in writing, if the homeowners policy would, in fact, provide coverage.
How to File a Complaint
Many California clients have asked how they can report a competitor that does not carry workers’ compensation insurance. You may report an uninsured employer to the nearest office of the Division of Labor Standards Enforcement. The offices are also listed in the state government section of the white pages of your local telephone directory under industrial relations, labor standards enforcement.
This information is designed for general informational and descriptive purposes only. The precise wording of each coverage is subject to specific conditions and endorsements of the actual policy issued. Always read your policy very carefully!
Dealing with a specialist provides your company with the knowledge that you are getting the best coverage available, and at the best possible price.
About being Illegally Uninsured:
Q. What happens if I’m uninsured and an employee is injured?
A. Failing to have workers’ compensation coverage is a criminal offense. Section 3700.5 of the California Labor Code makes it a misdemeanor punishable by either a fine of up to $10,000 or imprisonment in the county jail for up to one year, or both. Additionally, the state issues penalties of up to $100,000 against illegally uninsured employers.
If an employee gets hurt or sick because of work and you are not insured, you are responsible for paying all bills related to the injury or illness. Contact the information and assistance officer at your local DWC office for further information. You should be aware that workers’ compensation benefits are only the exclusive remedy for injuries suffered on the job when you are properly insured. If you are illegally uninsured and an employee gets sick or hurt because of work, that employee can file a civil action against you in addition to filing a workers’ compensation claim.
If you fail to pay required benefits you may also be contacted by the Uninsured Employers’ Benefit Trust Fund.
Q. What is the Uninsured Employers’ Benefit Trust Fund?
A. The Uninsured Employer’s Benefit Trust Fund (UEBTF) is a special unit within the Division of Workers’ Compensation that may pay benefits to injured workers who get hurt or ill while working for an illegally uninsured employer. The UEBTF pursues reimbursement of expenditures from the responsible employer through all available avenues, including filing liens against their property.
Q. Can I be fined for not carrying workers’ compensation insurance?
A. Yes, you can be fined and more. If the Division of Labor Standards Enforcement (state labor commissioner) determines an employer is operating without workers’ compensation coverage, a stop order will be issued. This order prohibits the use of employee labor until coverage is obtained, and failure to observe it is a misdemeanor punishable by imprisonment in the county jail for up to 60 days, or by a fine of up to $10,000, or both. The Division of Labor Standards Enforcement will also assess a penalty of $1,000 per employee on the payroll at the time the stop order is issued and served, up to $100,000 (Labor Code section 3722(a)).
Additionally, if an injured worker files a workers’ compensation claim that goes before the Workers’ Compensation Appeals Board and a judge finds the employer had not secured insurance as required by law, when the dispute is resolved the uninsured employer may be assessed a penalty of $10,000 per employee on the payroll at the time of injury if the worker’s case was found to be compensable, or $2,000 per employee on the payroll at the time of injury if the worker’s case was non-compensable, up to a maximum of $100,000 [Labor Code section 3722(b)].
Finally, as noted in answer to a previous question, failure to secure workers’ compensation insurance is a misdemeanor punishable by imprisonment in the county jail for up to one year, or by a fine of up to ten thousand dollars ($10,000) or by both that imprisonment and fine. (Labor Code Section 3700.5)
Q. How do I get proof of coverage?
A. Request a certificate of insurance from your insurance carrier.
Q. Where can I report an employer for not carrying workers’ compensation insurance?
A. You may report an uninsured employer to the nearest office of the Division of Labor Standards Enforcement (www.dir.ca.gov/dlse). The offices are also listed in the state government section of the white pages of your local telephone directory under industrial relations, labor standards enforcement.
**With few exceptions, Utah law requires employers to have workers’ compensation insurance coverage for their employees working in Utah. If you suspect an employer is wrongfully operating without workers’ compensation insurance, please contact the Utah Labor Commission, Industrial Accidents Division’s WC Policy Section at (801) 530-6099.