It is common for home stagers and other small residential services to refuse to carry workers’ comp. In most states, business owners or those without a minimum number of employees are not required to carry workers’ comp under state law. So if they are not required to have coverage, isn’t it fine to hire them anyway? NO!
Hiring them creates unlimited financial exposure for you! This is because, under workers’ comp law, you are liable for anyone who is injured while working for you. Period. It does not matter if they are your employee or not. It does not matter whether they were at fault or not (they could fall off their own rickety ladder). You become liable for their medical care and their lost earnings because it happened while they were working for you.
Won’t my homeowners’ general liability coverage protect me? Probably not. Insurance policy forms typically exclude coverage for any loss that should have been covered under workers’ comp.
What kind of claims might occur? A worker slips on your stairs and has a major fracture, or worse yet a traumatic brain injury. A worker moving heavy furniture suffers a career-ending back injury. The possibilities range from minor to disastrous. Workers for one of us have made three such claims; a broken ankle from stepping in a hole cost over $100,000. A severe knee injury from slipping on a wet porch cost $50,000. More recently, a ruptured disc from carrying tools upstairs has cost around $50,000. Some workers’ comp judgments for those without insurance have been in the millions.
How do you protect yourself? Demand a Certificate of Insurance showing coverage for both General Liability and Workers’ Compensation before you hire them.
Bert Lyles is CEO of Showhomes Franchise Corp., America’s largest home staging provider.
Judy Fobes has been a commercial insurance agent for over 30 years and since 2001 has owned PenEx Insurance Agency. PenEx focuses on Interior Design, Architects, Engineers, and Real Estate Stagers. To date, PenEx insures thousands of Real Estate Stagers. PenEx is nationally licensed.