Posted On 27 Sep 2021
Is It a Workers’ Compensation Claim?
A few years back, we had an interesting incident happen on one of the apple farms we insure. Like most farms in our area, they provided housing for their seasonal workers. One day an employee was sick and did not go to work. He decided to take a shower and adjust the temperature on the hot water heater for a really hot shower. Whatever he changed, ended up burning him badly. At first, we filed a workers’ compensation claim to cover medical bills and loss of wages. The compensation claim was denied stating he was an employee and staying on the farm but, at the time of the injury, he was not in the act of employment. We subsequently filed a claim with the farm’s insurance carrier who provided the general farm liability coverage. This policy also covered the medical expenses.
We are regularly receiving calls from clients with complicated stories about misfortune, damage and injury. We hear of bad luck wreaking havoc on our otherwise ordinary lives. Each incident is dependent on many factors. Did this injury occur at your home, at work, or elsewhere? Is there property damage? Is this an injury requiring medical care? Who is at fault and who is the victim? Each claim requires significant investigation that can drag on for significant periods of time. Claims occupy much our time, cause much worry and usually aren’t simple.
I got an interesting question yesterday that I was unable to answer. Hopefully, you’re still reading. The call was from a client who fell and suffered an injury while on her lunch break. She works in one space in a large complex. On the day of the accident, she “punched out” for lunch and was walking elsewhere in the complex when she tripped on an uneven walking surface. When she presented the claim for her injuries, the building owner denied payment. Because she was injured during the work day, the owner argued that her employer’s Workers’ Compensation coverage should apply. This raised the question of whether an employee is covered by Workers’ Comp while on her lunch break. The “Big I” was our resource when we researched the liability in this case and Workers’ Compensation in general.
The answer, as with so much in life, is, “It depends.” Specifically, it depends on the circumstances surrounding the injury and the what was customary for the job. A good illustration is a case decided by the New York Supreme Court’s Appellate Division, Third Department. An electrician reported to work at 7:55 A.M., discussed the week’s work plans with his partner, loaded his truck with materials and supplies, and headed for a job site. On the way, he stopped at a drive-through restaurant for coffee and a muffin. When he reached into his back pocket for his wallet, he felt a pop in his back; he eventually underwent surgery to repair herniated disks. Unable to work for nine months, he submitted a claim for Workers’ Comp benefits. The insurer disputed the claim and the case went to a Workers’ Compensation Law judge, who sided with the claimant. The insurer appealed and the Workers’ Compensation Board reversed the judge’s decision, finding that the stop for coffee deviated from the claimant’s employment and the injury therefore did not arise out of that employment. The claimant then appealed to the Third Department.
The court cited a 1999 decision that stated, “Activities which are purely personal pursuits are not within the scope of employment and are not compensable under the Workers’ Compensation Law, with the test being whether the activities are both reasonable and sufficiently work related under the circumstances.” (Emphasis added) It also cited earlier decisions to the effect that momentary deviations from the work routine for a customary and accepted purpose, such as coffee breaks, do not render a claimant ineligible for benefits. Noting that the claimant’s undisputed testimony that his stop at the drive-through for coffee was a brief one on his direct route to the job site, and that he routinely did this because his office lacked a coffee maker, the court held that the stop was a “momentary and customary break which did not interrupt his employment and which can only be classified as reasonable and work-related under the circumstances…” It reinstated the claimant’s benefits.
What does that mean for our client? Without more details about the accident, it’s impossible to say. Did the accident happen in area where she walks every day? Did she have to walk through that area in order to go to lunch? Was this area near her office, or was she in a location on the opposite side of the complex? Ultimately, the Workers’ Compensation Board may have to weigh the facts and make a determination. There is no cut-and-dried answer. And that’s the lesson for employers, employees and insurance agents alike: Don’t assume that an injury is not compensable just because it appears that it wasn’t work-related. Report the incident to the Workers’ Compensation insurer and let the investigation proceed.
No-Fault vs. Workers’ Comp: Which One is Primary?
One question that comes up frequently concerns how New York No-Fault insurance coordinates with Workers’ Compensation insurance when both apply to the same accident. In other words, which policy pays first — the Workers’ Compensation or the Auto No Fault?
N.Y. Insurance Law Sect. 5102(b) defines first party benefits for No-Fault as:
…payments to reimburse a person for basic economic loss on account of personal injury arising out of the use or operation of a motor vehicle, less
(1) Twenty percent of lost earnings computed pursuant to…this section.
(2) Amounts recovered or recoverable on account of such injury under state or federal laws providing…workers’ compensation benefits…
Therefore, any amounts an injured person receives from Workers’ Compensation will be deducted from the No-Fault benefits. Workers’ Comp is primary and No-Fault is excess.
N.Y. Workers’ Comp Coverage Endorsement on Homeowners Policy
Question from an IIABNY member: I have a personal lines customer who called saying he has a person come to his house every other week and do five hours’ worth of cleaning. He wanted to confirm there is liability coverage should she be hurt. I called the insurance carrier and the underwriter forwarded the attached Workers Comp endorsement, which to me is a bit confusing. Can you advise your understanding of this endorsement? I would assume if she were hurt on the premises and the insured was negligent (i.e., he allowed her to use a ladder that was defective and she fell), that his liability would respond. But what if she were hurt on the premises and he wasn’t negligent? Would the Workers Comp coverage kick in?
Answer: This endorsement provides so little coverage that the New York Insurance Department won’t even let insurers charge for it anymore (they used to be able to charge $3.) Essentially, it provides Workers’ Comp benefits to the insured’s employee (one with casual employment or regular employment of less than 40 hours per week) if that employee is subject to the New York Workers’ Comp Law. The question becomes, who fits the description of a covered person and also is subject to the Workers’ Comp Law? Almost no one:
Who Is Not Covered by The Workers’ Compensation Law?
The spouse and minor children (under 18 years old) of an employer who is a farmer as long as they are not under an express contract of hire (WCL §2 )
People, including minors, doing yard work or casual chores in and about a one-family, owner-occupied residence or the premises of a nonprofit, noncommercial organization (WCL §2 ). Casual means occasionally, without regularity, without foresight, plan or method. Coverage is required if the minor handles power-driven machinery, including a power lawnmower
Essentially, the endorsement provides benefits if a kid using a power mower or snowblower gets hurt while working on the insured’s property. If he’s using a shovel, he’s not eligible for benefits; if he’s fired up the Toro, he is. Otherwise, the endorsement doesn’t cover most domestic employees because those employees are not covered by the law (“coverage does not apply to an employee who is not required, under New York Workers’ Compensation Law, to be covered.”)
Another page on the Workers’ Comp Board’s Web site goes on to say:
Domestic workers include chauffeurs, nannies, home health aides, au pairs, nurses, baby-sitters, maids, cooks, housekeepers, laundry workers, butlers, companions, and gardeners working in a private household.
Domestic workers employed forty or more hours per week by the same employer (including full-time sitters or companions, and live-in maids) are required to be covered by a New York State workers’ compensation insurance policy.
Workers’ compensation insurance is NOT required IF the only people who work for the household are domestic workers in a private household who individually work less than 40 hours per week for that household and do not live on premises. However, a person who employs household help for less than 40 hours per week are encouraged to obtain a voluntary workers’ compensation insurance policy to protect both the employer and the employee.
Please note that a homeowner’s insurance policy’s workers’ compensation insurance rider does not cover any domestic employees for workers’ compensation benefits.
Therefore, this endorsement will not cover the person cleaning your insured’s home. He can either rely on his liability coverage or voluntarily buy a Workers Comp policy to provide coverage.
As always, call the office if you have a liability question @ (585) 589-6236.