Household employees · Workers’ compensation
A nanny’s injury is not a homeowners claim
Workers’ compensation pays medical care and part of lost wages when someone is hurt doing the job, generally without a fight over whose fault it was. A homeowners policy pays guests and other people you injure. It is built to exclude, or sharply limit, injury to someone you employ in the house. An umbrella sits on top of the homeowners liability limit. It does not create workers’ compensation where the homeowners form left it out.
The commercial cousin, which is not the same product: Colorado small-business workers’ compensation. Liability for a business, also different: small-business liability.
Calling them a contractor does not rewrite the job
Paying cash, or handing someone a 1099, does not decide the question. If you set the hours, provide the tools, and direct the work inside your home, the state may still treat that person as a household employee. The test is the state’s, not the label on the check. A caregiver, a housekeeper, a cook, and estate staff all sit in this bucket when the relationship is employment.
If they are truly a business with their own insurance, ask for a certificate before they start. Their policy has to name the work they are doing. Your homeowners liability still should not be the plan for their on-the-job injury.
What to ask before you assume you are fine
Which state is the work performed in, not where you file taxes. How many days and what wage. Whether anyone lives in. Whether you already have a workers’ compensation policy for a business that does not extend to the house. Domestic work and a shop payroll are often separate policies.
If someone is hurt and there is no workers’ compensation, the alternative is often a lawsuit, and the homeowners exclusion is the reason that lawsuit may not be covered. That is the gap. It is not fixed by raising the dwelling limit.
