Are You Liable? Protect Yourself from Home Worker Lawsuits
Are You Liable? Protect Yourself from Home Worker LawsuitsAs the housekeeper is vacuuming your living room, she trips over one of your daughter's toys and seriously injures her back. While your neighbor's teenage son is mowing your front lawn, he steps in a large hole and sprains his ankle. Will your homeowner's insurance cover you if one of these workers decides to file a lawsuit?
Many homeowners do not realize that they could be held financially liable if a maid, landscaper, nanny or another house worker were to suffer from an injury on their property. Here are some things you should keep in mind before you hire a home worker:
Is that worker an employee or a contractor?
When you hire someone to help out around the house, you should figure out whether he or she is an employee or a contractor. This is one of the factors determines whether or not you are liable for a worker's injury. So, how do you know if the worker is considered your employee or a contractor? It all comes down to how much control you have over the worker.
Let's say you hire a nanny named Lisa to take care of your children and do some light cleaning in your home. Lisa follows your instructions about how to care of your kids and how to complete certain household tasks. You supply Lisa with the supplies and tools she needs to do her job. Because you have control over how Lisa works, she is most likely considered your employee.
On the other hand, let's say you hire a professional landscaper named Bob to fertilize and mow your grass, trim the hedges and plant flowers in your yard. Bob uses his own lawn mower and yard tools and he does yard work for other homeowners, as well. Bob also has a team of workers who help him with his business, and he pays these workers. In this case, Bob would be considered an independent contractor.
Of course, these are two fairly simple examples. If you are uncertain about whether a worker in your home is considered a contractor or an employee, consult a lawyer or tax professional.
Understanding worker's comp insurance
Some states require that homeowners who have house worker "employees" to carry workers' compensation insurance coverage for them. However, even if your state does not require this, you should still consider purchasing this insurance for your employees. Why? Because if one of your employees is injured on your property, you may have to pay for their medical bills and other expenses out of your own pocket. However, with workers' compensation coverage, the insurance company will cover the costs.
Alternatively, if you hire a house contractor, such as a landscaper, carpenter or plumber, they should be covered by their own workers' compensation insurance. If a contractor is injured while doing work on your property, he or she will be covered under that policy. If the contractor doesn't have enough coverage, you may be held financially liable. However, depending on the circumstances, you may be able to file a lawsuit against the contractor as they are required by law to have sufficient workers' compensation coverage.
If you are looking to hire a house contractor, it's important to ensure they are covered for worker injuries, property damage and uninstalled materials. Don't just take their word for it. Ask for written proof that they have a contractor's license, workers' compensation insurance for themselves and any subcontractors and general liability coverage.
Know what your homeowner's insurance covers
When it comes to coverage for home workers, every homeowner's insurance policy is different. Depending on your home state, your policy may include a provision that provides limited coverage for minor workers performing lawn mowing or other tasks that require the use of power tools on your property.
On the other hand, your policy may specifically exclude domestic workers such as nannies or maids. Your policy may cover the injuries of household employees, but only after a lawsuit is filed against you. Because homeowner's policies vary widely, it's important to read through your contract and talk to your insurance agent before you hire a home worker.
Consider an umbrella policy
If you discover that your homeowner's policy offers limited or no liability coverage for workers, you may consider purchasing additional liability insurance. While you may have some personal liability coverage through your homeowner's policy, it's probably not nearly enough to cover a major lawsuit from a home worker. If someone were to file a lawsuit against you, you could end up losing hundreds of thousands of dollars or more-even if you win.
You can further protect yourself with what's known as an umbrella policy. This type of policy offers a higher level of liability coverage and ensures that you and your family will be protected if someone sues you for damages. Umbrella policies are typically sold in million dollar increments, and you can obtain a policy once your home and auto insurance policies meet a minimum "attachment point"-typically a liability limit of $250,000 or $500,000.
Check with the Better Business Bureau
Before you hire a home worker, you should contact the Better Business Bureau for more information. They can tell you if any consumers have filed complaints against the worker. Visit the bureau's website at www.bbb.org.
Any questions about Allstate Homeowners Insurance Policies, please feel free to call Khalid Umerani, Agent, Allstate-NOVA Insurance Group at tel. 703.263.7800
www.south-riding-insurance.comwww.loudoun-insurance.comLabels: Allstate Aldie, Allstate Chantilly, Allstate South Riding, Allstate Stone Ridge, Khalid Umerani
The Many Colors of Insurance Fraud - And How to Prevent It
The Many Colors of Insurance Fraud - And How to Prevent ItAccording to the Coalition Against Insurance Fraud, a division of the Insurance Resource Council, one in five Americans or 45 million people say it is okay to defraud an insurance company in certain circumstances. Furthermore, according to a 2008 Four Faces study by the IRC, consumer tolerance of of specific insurance schemes has increased over the past ten years. To be more specific, the study says there is a decline in the number of Americans who believe it is unethical to:
- misrepresent facts on an insurance application to lower their premiums (82 percent today, down from 91 percent in 1997);
- file a claim for damage that occurred before the damage was covered (85 percent, down from 91 percent);
- inflate a claim to cover the deductible (84 percent, down from 91 percent); and
- misrepresent an incident in order to be paid for an uncovered loss (84 percent, down from 92 percent).
Insurance fraud comes in many different shapes, colors and sizes. The one common denominator is that, regardless of the form it takes, it costs insurers, and ultimately you, the consumer, billions of dollars per year. What are some of the different types of fraud that take place and what can be done to prevent it?
Insurance fraud cuts a broad swath through the insurance industry and can occur anywhere in the insurance transaction from fraudulent applications for coverage to fraudulent filing of claims. Insurance fraud is not only committed by the insurance buyer, but by attorneys, physicians, and other third parties to the insurance transaction. Even insurance company employees have been caught bilking their employers. Following are some sobering statistics:
Fraudulent and abusive auto-injury claims are a costly problem. Fraud and "buildup" added $4.8 billion to $6.8 billion in excess payments to auto injury claims in 2007. That means 13-percent to 18-percent increases in payments under private-passenger auto policies from 2002. (Insurance Research Council, Nov. 2008)
Auto insurers lost $16.1 billion due to premium rating errors in private-passenger premiums in 2007. Premium rating errors account for 10 percent of the $166 billion in personal auto premiums. Fraud accounts for a portion of these losses. Some drivers will seek to lower their premiums by schemes such as deliberately misrepresenting mileage driven, how the vehicle is used and where it's registered. (Quality Planning Corporation, 2008)
More than $2.4 billion in recoveries for fraud, waste and abuse in federal healthcare programs are expected for the first half of FY 2009 (October 2008 through March 2009). Some 1,415 individuals and organizations also were excluded from federal programs for fraud abuse; 293 criminal actions were brought, as were 243 civil actions. (Semiannual Report to Congress, Office of Inspector General, Department of Health and Human Services, Office, 2009)
Medicare and Medicaid lose an estimated $60 billion or more annually to fraud, including $2.5 billion in South Florida. (Miami Herald, August 11, 2008). Medical identity theft comprises about 3 percent (249,000) of 8.3 million overall victims of identity theft. (Federal Trade Commission, Identity Theft Survey Report, 2007)
With the advent of the Internet, an aging population, and other trends making insurance fraud a lucrative business, it will be difficult to completely eradicate the problem. Federal and state authorities, insurers, and consumer watchdog groups are all working diligently to stem the tide of insurance fraud. Here's what you can do:
First, and most obvious is to not commit fraud. The temptation to lie on an insurance application to get a better rate, an example of what is called soft fraud, should be tempered by the fact that it increases the risk of insurers canceling or even rescinding coverage upon evidence of the fraud, not to mention the legal implications.
- Ask for detailed medical and repair bills and examine closely for unusual or suspicious charges.
- If you are involved in or witness an accident that appears to be of a suspicious nature, and you feel that it may have been staged, report the incident to local law enforcement.
- Report fraud when you become aware of it. If your state does not have a hotline, your insurance company probably does. So does the National Insurance Crime Bureau. A hotline exists for Medicare and Medicaid, and you can go on the Coalition Against Insurance Fraud's website for further information on reporting fraud (www.insurancefraud.org).
- As with credit card and social security numbers, guard your insurance identification card numbers and report any theft.
Need help with your insurance policies? Please call Khalid Umerani @ NOVA Insurance Group in Chantilly / South Riding, VA at tel: 703.263.7800
www.south-riding-insurance.comwww.loudoun-insurance.comLabels: Allstate South Riding, Insurance Fraud, South Riding Insurance
Hands-Free Phones Not As Safe As You May Think
Hands-Free Phones Not As Safe As You May ThinkIt seems like everywhere you turn these days, you see drivers chatting away seemingly to no one at all. Of course, by now we usually assume they're talking to someone on their hands-free cell phone headset or their built-in OnStar phone.
Although many drivers believe they're safer using these hands-free options, recent research proves otherwise. A new study shows that drivers are no safer talking on a hands-free phone than if they were using a hand-held one.
Look mom, no hands!
The new study, conducted by Yoko Ishigami, Dalhousie University and Raymond Klein, appeared in the National Safety Council's (NSC) Journal of Safety Research this summer. The study shows that any type of cell phone use distracts the driver from focusing on the road. The human brain simply can't focus on the conversation and safe driving at the same time.
The researchers discovered that hands-free phones are just as dangerous for drivers as hand-held phones. According to the study's findings, talking on any type of cell phone impairs a driver's reaction times and causes them to reduce their vehicle speeds. This leads to more driving errors and car accidents.
Based on the study, there's at least one difference between drivers using hands-free phones and those using hand-held ones. While drivers talking on any type of cell phone tend to slow down, those using hand-held phones typically slow down more.
Don't talk and drive
This new study is not the only research that shows hands-free phones are no safer for drivers. Several other studies have made the same claim.
However, until now, many lawmakers obviously believed hands-free phones were safer. As a matter of fact, five U.S. states and Washington D.C. have passed laws requiring drivers to use hands-free phones instead of hand-held ones. But these new studies claim that it's the conversation-not the act of holding a cell phone-that causes drivers to lose focus.
It's clear that cell phones cause serious problems and lead to countless car accidents on our nation's roads and highways. According to some estimates, more than 636,000 car crashes, 330,000 injuries, 12,000 serious injuries and 2,600 deaths are caused by distracted drivers talking on a cell phone in the U.S. each year.
In January 2009, the NSC called for a complete ban on cell phones for drivers. Other national organizations and lobbyists may follow suit.
In the meantime, drivers may want to take caution. Although no laws have officially been passed, you may want to refrain from taking calls or at least limit your cell phone use when you're behind the wheel. While avoiding cell phone calls when you're driving may be an inconvenience, it could end up saving your life in the long run.
Please call Khalid Umerani, Agent, NOVA Insurance Group (Chantilly, VA) to discuss your car insurance needs at tel: 703.263.7800. We are licensed to do business in Virginia, Maryland and DC.
www.south-riding-insurance.comwww.loudoun-insurance.comLabels: 20151 Car Insurance, 20152 Car Insurance, Hands Free Phones, South Riding car insurance
