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The Office of General Counsel issued the following opinion on November 9, 2005, representing the position of the New York State Insurance Department.

RE: Homeowner’s insurance policy and workers compensation insurance for domestic worker

Question Presented

Does a homeowner’s policy provide workers compensation coverage for liability arising out of the acts of independent contractors engaged in major home improvement work?


A homeowners policy must provide coverage for the obligations that a homeowner incurs pursuant to the provisions of the Workers’ Compensation Law. Whether a homeowner has an obligation under the Workers’ Compensation Law for liability arising out of the acts of independent contractors engaged in major home improvement work is a matter best addressed by the Workers’ Compensation Board.


The inquirer states that some of the inquirer’s homeowner clients contract with licensed contractors to do major home improvement work on their homes. The inquirer typically advises the inquirer’s clients to obtain evidence of insurance from the contractors. However, some contractors are advising the homeowners that contractors are covered under the workers’ compensation coverage that is included with every New York homeowners policy. The inquirer requests clarification as to whether the homeowners policy will provide workers’ compensation coverage if the contractor or the contractor’s employee is injured while engaged in work on the premises.


N.Y. Ins. Law § 3420(j) (McKinney Supp. 2005) provides, in pertinent part:

(j)(1) 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.

(2) The term "policyholder" as used in this subsection shall be limited to an individual or individuals as defined by the terms of the policy, but shall not include corporate or other business entities or an individual who has or individuals who have in effect a workers' compensation policy which covers employees working in and about his or their residence.

Although an insurer may provide broader coverage, § 2320(j) requires an insurer to provide only coverage for obligations that the homeowner (as an "employer") may incur pursuant to the Workers’ Compensation Law to an employee arising out of and in the course of employment of less than forty hours per week. N.Y. Workers’ Comp. § 2 (McKinney 2005) defines "employer" (subsection (3)); "employee" (subsection (4)); and "employment" (subsection (5)).

Section § 2(5) provides, in pertinent part:

"Employment" includes employment in a trade, business or occupation carried on by the employer for pecuniary gain, or in connection therewith, except where the employer elects to bring his employees within the provisions of this chapter as provided in section three, and except employment as a domestic worker as provided in section three, and except where a town elects to have the provisions of this chapter apply to the town superintendent of highways.

There are a number of exceptions to the definition of employee that may be found in N.Y. Workers’ Comp. § 2, 3, and 113 (McKinney 2005). For example, § 2(4) provides that "[t]he term ‘employee’ shall not include persons engaged by the owner in casual employment consisting of yard work, household chores and making repairs to or painting in and about a one-family owner-occupied residence." Previously, the Department issued Circular Letter No. 2 (1985) listing some of the kinds of employees for which the homeowner incurs no obligation.

There are many cases interpreting what an "employee" means. For example, in Emmi v. Emmi, 186 A.D.2d 1025; 588 N.Y.S.2d 481. (4th Dept. 1992), the homeowner was not an "employer" within the meaning of N.Y. Workers’ Comp. § 11 (McKinney 2005) because he did not run a business. See also Marques v. Salgado, 12 A.D.3d 817; 784 N.Y.S.2d 241 (3rd Dept. 2004), which concluded on the facts presented that the claimant was an employee of the independent contractor and not the homeowner.

Inasmuch as this is a question involving an interpretation of the Workers’ Compensation Law, the Department suggests that the inquirer contacts the Workers’ Compensation Board for its opinion.

For further information one may contact Principal Attorney Paul A. Zuckerman at the New York City Office.

Department of Financial Services


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