Hiring Help Around the House? What Every Homeowner Should Know

We’ve all been there.

Between work, kids, pets, activities, and everyday responsibilities, that garage still needs cleaned out, the flower beds need planted, and the house could use a deep cleaning. Sometimes there simply aren’t enough hours in the day.

When the to-do list becomes overwhelming, many homeowners consider hiring help. But before you hand someone cash and a cold drink, it’s important to understand the potential liability and insurance implications.

Whether you hire a professional company or a neighborhood teenager, there are risks to consider.

Professional Service vs. Hiring Someone Directly

Hiring a Professional Service: Using a licensed and insured company is often the safest option.

Advantages:

• The company typically carries liability insurance.
• Workers are generally covered by workers’ compensation insurance.
• Claims for injuries or property damage are usually handled through the company’s insurance.

Before Hiring, Ask:

• Do you carry liability insurance?
• Can you provide a certificate of insurance?
• Do you have workers’ compensation coverage?
• Are your workers employees or independent contractors?
• What happens if someone is injured while working on my property?

Hiring a Friend, Neighbor, or Local Teen: Many homeowners choose to hire someone they know and simply pay them cash for the work. While this may seem informal, the liability exposure is very real.

Potential Risks:

• If the individual is injured on your property, you could be responsible for medical expenses and damages.
• Your homeowners policy may not cover injuries to paid workers.
• Repeatedly hiring someone for work may create an employer-employee relationship under state law.
• Hiring minors does not eliminate your liability exposure.

Understanding Your Insurance Coverage

Homeowners Insurance

Most homeowners policies provide liability protection for guests and visitors. However, coverage for individuals who are being paid to perform work may be limited or excluded unless you have specific endorsements in place.

Workers’ Compensation

Some states require homeowners to carry workers’ compensation insurance for domestic employees such as housekeepers, caregivers, or other regularly hired help.

Requirements vary by state and may depend on:

• How often the person works for you
• The amount you pay them
• The type of work being performed

Personal Umbrella Policy

An umbrella policy provides an extra layer of liability protection if a claim exceeds the limits of your homeowners policy.

For many homeowners, an umbrella policy can provide valuable peace of mind.

The Bottom Line

Before hiring anyone to work on your property:

• Ask for proof of insurance when using a service provider.
• Understand whether your homeowners policy covers injuries to paid workers.
• Check your state’s requirements regarding workers’ compensation for domestic employees.
• Closely supervise work being performed by minors.
• Contact your insurance agent if you regularly hire household help.

A little due diligence today can help prevent a costly liability claim tomorrow. Reach out to us today if you want to make sure that you are covered properly!