Does a Homeowner Need a Workers Compensation Policy for Construction on Their Own Home?
A homeowner is hiring a contractor to do substantial work ($350,000) on his home. The contractor provides a certificate of liability insurance but claims he does not need workers’ compensation because he subs out all of the work to subcontractors or does the work himself. If a worker is injured on the property and claims workers’ compensation benefits, what is the exposure for the homeowner? Does the homeowners policy provide any protection? Should the homeowner purchase a minimum premium workers’ compensation policy and would this protect him? A homeowner is not liable to pay workers’ compensation benefits to workers injured on the premises, provided the homeowner is not in the business of construction; that is, the homeowner is not acting as the general contractor. The principal employer statute (Section 31-291) would not apply in this case to hold the homeowner contingently liable for injuries to employees of uninsured contractors hired by his or her general contractor. If the homeowner is acting as the general contractor, then the homeowner will be expected to pay the benefits unavailable from the uninsured contractor.
A principal employer (general contractor) who has no employees is not legally required to have workers’ compensation insurance; nevertheless, such principal employer will have an exposure for the payment of benefits under Section 31-291. Consequently, a homeowner in the construction business (principal contractor) should always obtain a workers’ compensation policy, whether employees are hired or whether only independent contractors are hired.