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

George E. Pataki
Governor

Gregory V. Serio
Superintendent

The Office of General Counsel issued the following opinion on May 23, 2003, representing the position of the New York State Insurance Department.

Re: Homeowners Insurance Policy & Workers’ Compensation Benefits for Domestic Worker

Questions Presented:

1. If a New York insurance policy provides comprehensive personal liability insurance for a one-family owner-occupied dwelling, does the New York Insurance Law require such policy to provide workers’ compensation coverage for a domestic worker employed for thirty hours per week by the policyholder?

2. If such policy does not provide workers’ compensation coverage for the domestic worker, how may such policyholder secure workers’ compensation coverage for the domestic worker?

Conclusions:

1. No. The New York State Insurance Law does not require an insurance policy, which provides comprehensive personal liability insurance on a one, two, three or four-family owner-occupied dwelling, to include workers’ compensation coverage for a domestic worker who works fewer than forty hours a week for the same policyholder.

2. The policyholder may obtain workers’ compensation coverage for the domestic worker if the policyholder elects to secure compensation to such employee 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 workmen’s compensation insurance in this state." N.Y. Workers’ Comp. Law §§ 3(1)(Group 19), 50 (McKinney 1992 & Supp. 2003).

Facts:

A policyholder ("Policyholder") has a homeowners insurance policy ("Policy") on a one-family dwelling. The Policyholder plans to employ a domestic worker ("Domestic") who will work thirty hours per week. The Policyholder has been informed by its insurer ("Insurer") that: (1) the Insurer does not provide riders or endorsements for such coverage to its homeowners insurance policies; (2) the Policy will include workers’ compensation coverage for the Domestic because New York State Law mandates such coverage; and (3) the Policyholder does not need to purchase additional insurance to provide the Domestic with workers’ compensation coverage.

Analysis:

N.Y. Ins. Law § 3420(j)(1) (McKinney 2000) requires 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, N.Y. Workers’ Comp. Law § 3(1)(Group 19) (McKinney 1992), by securing compensation in accordance with the conditions 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 workmen’s compensation insurance in this state."

Here, the Domestic works fewer than forty hours a week for the Policyholder, and, therefore, 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, nor does it require the Insurer to offer such coverage through an endorsement or rider.

Accordingly, although under no obligation to do so, the Insurer may provide workers’ compensation coverage for the Domestic under the Policy. It is recommended that you examine the Policy provisions and verify the scope of the Policy’s workers’ compensation coverage with the Insurer.

In the event that the Policy does not provide workers’ compensation coverage for the Domestic, the Policyholder will have to purchase additional workers’ compensation insurance in the form of an endorsement, rider, or separate workers’ compensation insurance policy to provide the Domestic with such coverage. The Policyholder may purchase such coverage from the New York State Insurance Fund, or from any insurer authorized to transact the business of workers’ compensation insurance in New York State. N.Y. Workers’ Comp. Law § 50; N.Y. Ins. Law §§ 1101, 1102, 1113 (McKinney 2000 & Supp. 2003).

For further information you may contact Senior Attorney Kristian Earl Lynch at the New York City Office.