The Office of General Counsel issued the following opinion on January 6, 2003, representing the position of the New York State Insurance Department.
Re: Homeowners Insurance Policy & Workers Compensation Benefits for Domestic Worker
Does a homeowners insurance policy issued in New York State, which provides comprehensive personal liability insurance with a workers compensation endorsement for a one-family owner-occupied dwelling, provide workers compensation coverage to a domestic worker employed for thirty hours a week by the policyholder?
The New York State Insurance Law does not require homeowners insurance policies to provide voluntary or elective coverage to employees who meet a statutory exception to the rule of mandatory coverage under the Workers Compensation Law. As described, the domestic worker is exempt from such mandatory coverage; therefore, the homeowners insurance policy will cover the domestic worker only if the policy provides for the homeowners election of such coverage and the homeowner so elects.
A homeowner (the "Homeowner") has a homeowners insurance policy on a one-family dwelling with a workers compensation and employers liability endorsement (the "Policy"). The Homeowner employs a domestic worker (the "Domestic") who works thirty hours a week for the Homeowner.
N.Y. Ins. Law § 3420(j)(1) (McKinney 2000) requires homeowners insurance policies, which provide comprehensive personal liability insurance coverage for one to four family owner-occupied dwellings, to include workers compensation coverage, but does not require such policies to provide workers compensation coverage to employees that are not required to be covered under the Workers Compensation Law; § 3420(j)(1) states the following:
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.
N.Y. Workers Comp. Law §§ 3(1)(Group 12), § 2(4) (McKinney 1992 & Supp. 2003) excepts domestic workers, who are not employed by the same employer for a minimum of forty hours per week, from the rule of mandatory coverage under the Workers Compensation Law. However, the employers of such domestic workers may elect to bring such employees under the law by securing compensation in accordance with the terms of N.Y. Workers Comp. Law § 50 (McKinney Supp. 2003), which authorizes an employer to secure compensation to his employees by (1) "insuring and keeping insured the payment of such compensation in the state fund," or (2) "insuring and keeping insured the payment of such compensation with any stock corporation, mutual corporation or reciprocal insurer authorized to transact the business of workmens compensation insurance in this state." N.Y. Workers Comp. Law § 3(1)(Group 19) (McKinney 1992).
Here, the Domestic works fewer than forty hours a week for the Homeowner, and, accordingly, meets the statutory exception to the rule of mandatory workers compensation coverage. Consequently, the New York State Insurance Law does not require the Policy to include workers compensation coverage for the Domestic. Therefore, the Policy will only cover the Domestic if the election of such coverage is included within its contract terms.
For further information you may contact Senior Attorney Kristian Earl Lynch at the New York City Office.