Skip to Body

3 Vital Facts Rental Property Owners Need To Know About Workers’ Compensation

Return to Blog

3 Vital Facts Rental Property Owners Need To Know About Workers’ Compensation

Categories: Essentials Planning Property Management Safety

Published 03/25/2021

Photo by Sora Shimazaki from Pexels

Rental Property Owners face many risks and exposures, and some are not aware of what their insurance covers specifically. Many Rental Property Owners do not have coverage for what they should, which accounts for millions of dollars in uninsured claims each year.

That proves to be vital for rental owners to have a specialized broker in their industry and understands their unique needs; A Broker with experience in all the exposures and necessary coverage to advise you thoroughly. Here are three helpful scenarios to understand the importance of workers’ compensation insurance:

  • A property manager’s handy husband fell from a tree he was trimming to help his wife win kudos from the boss. He sustained injuries requiring medical treatment. The building owner now wished they had not passed on the recommended Workers Compensation Insurance.
  • An on-site manager paid a tenant who was a handyman by trade $150 to paint a vacant unit. The tenant performed the work and then stepped on a nail either on the premises or elsewhere during his travels as a handyman – no one could prove where. Five days later, the tenant/handyman died of complications from his injury. This building owner settled in court for an undisclosed amount.
  • A plumbing vendor’s employee fell off a balcony. The plumber did not have valid Workers Compensation Insurance. Fortunately, in this situation, the building owner had coverage. Workers Compensation defended the insured, so there was defense with no out-of-pocket cost for him.

In each case, the property owner was potentially liable for the incident. If an uninsured vendor, service provider, or even an unpaid volunteer is injured while performing work on your behalf, you could be held liable.

It’s a potential for financial loss that income property owners and condo associations are seldom aware of — even if you use a professional property management company, you could still be at risk! Here are few relevant key facts about Workers Compensation Insurance every rental property owner should be aware of:

  • By law, anyone who contracts for or bids on a construction project valued at $500 or more (total labor and materials) must have a license by the Contractors State License Board. All licensed contractors are required to have workers’ compensation insurance by law.
  • Owner-builders are required to have workers’ compensation coverage for the people they hired to perform the work. An owner-builder is what the term indicates: the person owns the property and acts as the general contractor on the job. They either do the work or have employees (or licensed subcontractors) work on the project. Some homeowners believe they can save money by not hiring a licensed general contractor to oversee property improvements. Or, they try to save money by hiring unlicensed individuals and lying on the permit application by saying they, as homeowners, will do the work.
  • Even if the vendor provides a certificate that shows the vendor has workers’ compensation insurance - it may prove not to be valid later, and the owner is still liable.
  • If a vendor works for an owner for more than 52 hours in 90-days for more than $100, then workers’ compensation insurance requirement applies.

If you have any questions regarding workers’ compensation, call your insurance agent to guide you through this process. Many talented and knowledgeable insurance agents are available to help you. Are you interested in speaking with a member of the Advent Team for a recommendation? Give us a call at (510) 250-7918 ext. 7, or email us at

Return to Blog