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Protect Yourself by Insuring Domestic Workers
Have you ever wondered whether you need workers' compensation insurance protection in the event that your housekeeper, nanny, or gardener is
injured while working for you?
Perhaps you already carry workers' compensation to compensate these domestic employees for their medical expenses and lost wages if they are
injured on the job. But if instead you depend on your homeowners policy to pay for the injured domestic employee's financial loss, you are
unnecessarily putting yourself and your employee at risk. Why? Because as Skip Schrayer, President of Auto & Home Insurance Agency explains,
"Homeowners insurance was never intended as a substitute for workers' compensation coverage."
"If a visitor in my home is bit by my dog or injured from slipping on my pool deck, and then files a claim against my homeowners insurance
for their damages, their medical costs will be reimbursed without regard to fault up to the limit of my medical payments coverage on my homeowners
policy, which is usually $5,000 or $10,000. However, medical expenses in excess of my medical payments limits, loss of wages, and other financial
loss will only be paid by my homeowners policy if I was at fault for the injury."
Relying solely on your homeowners coverage to protect you and your domestic employee from the losses resulting from the domestic employee's
injury while in your employ presents the following problems:
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In Illinois, a homeowner who employs a domestic worker for more than 40 hours per week for 13 or more weeks per year is required by law to carry
workers' compensation coverage for that worker. Employers who knowingly fail to obtain required coverage can be fined by the state up to $500 for
every day of noncompliance, with a minimum fine of $10,000. In addition, if a claim is compensable under the Workers' Compensation Act in your state,
your homeowners policy will not be able to respond at all.
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If the domestic employee files a workers' compensation claim against a homeowner who is not required to and does not carry workers' compensation
insurance coverage, then the homeowner must still defend the workers' compensation claim at his own expense, whether or not the claim is legitimate.
Hiring a lawyer to defend you will likely cost more than several years of workers' compensation premium.
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If the injury is serious, medical expenses in excess of medical payments coverage and significant wage loss may result. To avoid major financial loss,
the domestic employee will likely attempt to prove that you were at fault. Because proving an at-fault accident is often adversarial,
frustrating and expensive, the relationship with your employee may become strained and even irreparably damaged.
Homeowners whose domestic employees work fewer hours than stated above are not mandated to carry a workers' compensation policy. However, Auto &
Home Insurance strongly recommends that homeowners with domestic employees purchase workers' compensation insurance because it eliminates all of
these problems. Whether your housekeeper falls down the stairs, your cook is burned during dinner preparations or your nanny is hurt in a car
accident while driving your child to school, if you carry workers' compensation coverage, your insurer will pay for the employee's medical
expenses and two-thirds of his lost wages, regardless of liability or fault.
Workers' Compensation Protects You
Workers' compensation insurance protects you, the employer, as well as your household employees, from the adverse consequences resulting from the
employee's job related injury. Knowing that your assets and your domestic employee's well being are protected can bring you genuine peace of mind.
To obtain a workers' compensation policy for a domestic employee, you must list your federal identification number (Employer's Identification Number
or Social Security Number) and be withholding and paying all appropriate income taxes. For more information about requirements and coverage, please
call us at (800) 437-4814.
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