New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

The Office of General Counsel issued the following informal opinion on September 4, 2002, representing the position of the New York State Insurance Department.

RE: Homeowner’s Policy Inclusion of Workers Compensation and Employers Liability Coverage

Question Presented:

Is it permissible under the New York Insurance Law for an insurer to include coverage for workers compensation and employers liability insurance in a homeowner’s insurance policy that insures a co-operatively owned apartment, even though the insured does not have a need for such coverage?

Conclusion:

It is permissible under the New York Insurance Law for an insurer to include coverage for workers compensation and employers liability insurance in a homeowner’s insurance policy that insures a co-operatively owned apartment.

Facts:

A resident-owner of a co-operative apartment has a homeowner’s insurance policy that includes coverage for workers compensation and employers liability insurance. The resident-owner questioned his insurer as to why such coverage is included in his policy. The insurer stated that coverage is provided for "possible employment of a gardener or a domestic." The resident-owner inquired whether it is permissible under the New York Insurance Law for his insurer to include coverage for workers compensation and employers liability insurance in his homeowner’s insurance policy when he does not have a specific need for such insurance.

Analysis:

N.Y. Ins. Law § 3420(j)(1) (McKinney 2000) states:

Notwithstanding any other provision of this chapter or any other law to the contrary, every policy providing comprehensive personal liability insurance on a one, two, three or four family owner-occupied dwelling, issued or renewed in this state on and after the effective date of this subsection shall provide for coverage against liability for the payment of any obligation, which the policyholder may incur pursuant to the provisions of the workers' compensation law, to an employee arising out of and in the course of employment of less than forty hours per week, in and about such residences of the policyholder in this state. Such coverage shall provide for the benefits in the standard workers' compensation policy issued in this state. No one who purchases a policy providing comprehensive personal liability insurance shall be deemed to have elected to cover under the workers' compensation law any employee who is not required, under the provisions of such law, to be covered.

The Department has previously determined that a condominium apartment that is inhabited by its owner is a "one-family, owner-occupied dwelling" within the meaning of N.Y. Ins. Law § 3420(j). However, the ownership interest in a condominium apartment differs from the ownership interest in a co-operative apartment. Each unit in a condominium apartment building is owned by its purchaser. A co-operative apartment building is owned by all of its resident-purchasers as shareholders, to whom the apartments are leased. Thus, a co-operative apartment is not "a one, two, three or four family owner-occupied dwelling" within the meaning of N.Y. Ins. Law § 3420(j).

While an insurer of a policy providing comprehensive personal liability insurance on a co-operative apartment is not required under N.Y. Ins. Law § 3420(j) to include coverage for workers compensation and employers liability insurance, the insurer is not prohibited from doing so. An insurer that is specifically licensed to write workers compensation insurance may choose to include workers compensation and employers liability coverages in its homeowner’s insurance policies. Such insurer may choose to make those coverages an inseparable part of its homeowner’s insurance policies by indicating this in its policy form and rate filings with the Superintendent.

For further information you may contact Sally Geisel at the New York City Office.

 


1 N.Y. Ins. Law § 2305 (McKinney 2002 Pocket Part) requires an insurer to file its property/casualty insurance rates with the Department. N.Y. Ins. Law § 2307 (McKinney 2002 Pocket Part) requires an insurer to file its property/casualty insurance policy forms with the Department.