Renter Injured on Property

[shintao]

My question involves an injury that occurred in the state of: California

A renter I was evicting, after paying 2mos rent/then no rent for 8mos., is suing me (case pending WC) for a permanent injury he received on my property. He stepped on a nail, infected his foot, ended in injury.

In a strange twist, the renter claimed Work Comp, claiming I hired him as a handyman in exchange for rent.

The WC lawyer I am assisting as a witness, as he was not an employee, has told me if the renter wins the WC case & award, he cannot sue me for the injury that occurred on my property.

I just want a opinion/confirmation, is that a true statement? Please explain why. Thank you.

[Mr. Knowitall]

If he's an employee and you have worker's compensation coverage, absent your intent to injure him worker's compensation is his exclusive remedy for an on-the-job injury.

[SChinFChin]

Be very careful with this.

I owned a business in NY, had a few accidents covered under WC. I also own rentals. Under NYS laws, a worker cannot sue his employer under workman's comp under law, BUT under NYS laws, the employer is obligated to carry a WC policy, or is penalized under the the law. In addition, the prinicpal and officers are held personally responsible in the event of accidents where there is no coverage, so a corp or an LLC is not going to help you here.

I have commercial GL (general liability) insurance, and there is an exclusion in it for WC, stated in bold letters on a separate page so there can be no misunderstanding, so if an employee sues me, it is NOT covered under GL. In fact, under GL, if you are under insured under one, say as in an auto policy, your policy limit is $25,000, the damages are $100,000, you would be responsible for the any overage over $25,000. In a WC case, there is no overage, as all the employee is entitled to is what is covered under WC.

As you most likely have GL coverage, the first thing I would do is check is to see if you have WC coverage in it, not excluded, and then if there are any coverages for 1099 contractors, which he can also claim to be.

If I was playing it safe, and this appears to be rental property, it is safer to say a tenant was injured by an exposed nail as opposed to an employee and if it is under the interpretations of NYS law, as I have checked with my insurance agent on this, and I was told I defintitely have to have a WC policy if a tenant claims to be doing work for me. I would be on safer ground insurance wise saying "I have no idea why he's doing unauthorized repairs", and all that could happen is you are found to have an unsafe habitat, and you GL would cover you. If my tenant was DOING WORK AS AN EMPLOYEE, my GL would not cover me at all, only WC would.

Under NYS law, if he proved he is an employee, and for my rentals, I did not buy a WC policy, GL does not cover me at all, so I am totally out of luck, and even if I held the properties under an LLC, since the principals are personally held responsible under WC laws.

You'll have to check under CA laws, what happens if an "employee" is injured, the employer has NO WC policy at all, then what happens?? Your lawyer looked into one aspect, and YES, is correct if you have WC coverage, and there are NO consequences to you if you don't have a WC policy. I owned rentals for over 30 years, and I don't know any small LL's out there buying a WC policy. For large buildings with staff, YES. My agent tells me I need a minimum payroll of $25,000 to get a WC policy, or start paying premiums for one. Once I start that, I would have to start reporting payroll taxes, pay UI (unemployment) which opens up another can of worms.

When I file my WC claims, I have to provide my pyroll tax records for the previous 12 months to show the employee is eligible and covered, even with a WC policy, and if I don't pay payroll taxes, the person is NOT considered an employee and is not covered even if I pay WC premiums, as in the case of 1099 contractors. I doubt payroll taxes or UI are paid for tenants doing some work, nor Federal 941's for SS, Medicare, employer matching portions etc. filed.