The Uninsured Mover & Workers Compensation Insurance

A Homeowner's Recipe For Financial Disaster

By Christopher Noblit

"Accidents Happen." But what most homeowners don't realize is that if a worker is injured on their property, it is you -- the homeowner -- who can be held liable for all medical costs unless the employee is covered by workers compensation insurance. Hospital bills for serious accidents can be extraordinarily expensive and homeowner's insurance policies normally exclude such injuries.

Here is a true story (based on the 2002 California Court of Appeal decision in Fernandez v. Lawson, 119 Cal.Rptr.2d 767.) that illustrates the problem :

Joseph Truman hired Anthony's Tree Service (ATS) to trim his tall trees for $450. ATS's owner, Eliseo, gave Truman his business card describing ATS services such as topping, trimming, tree removal and cleaning trees.

The business card listed a license number so Truman concluded the company was experienced and capable of doing the tree trimming. The license number, however, was for an expired city business license and did not assure ATS was capable to doing the dangerous tree trimming work.

When Truman asked Eliseo for evidence of his workers' compensation insurance on his tree trimmer employees, Eliseo showed Truman an expired policy. Eliseo promised to bring the current policy the next day when the tree trimming was to begin.

But the next day, before tree trimming began, Eliseo told Truman he forgot to bring the current workers' compensation insurance policy. However, Truman allowed work to begin because he figured the license number on the ATS business card meant there was adequate insurance.

Unfortunately, ATS tree trimmer employee Miguel was severely injured when he fell from a tall tree. Upon learning his employer, ATS, had no workers' compensation insurance, Miguel sued homeowner Truman. When Truman contacted his homeowner's insurance company, he learned he was not insured for this type of injury because Miguel was not Truman's direct household employee.

If you were the judge, would you rule Truman is liable to tree trimmer Miguel for his injury damages? Well, the judge said YES he was.

Because ATS was uninsured and unlicensed, the judge explained, Truman became the employer of Miguel. Therefore, Truman was obligated to provide workers' compensation insurance benefits to Miguel.

This type of very dangerous work does not come within the household employee exception for coverage under the federal Occupational Safety and Health Act (OSHA) rules, the judge emphasized.

At the very least, the judge continued, homeowner Truman should have verified the ATS workers' compensation insurance policy. Therefore, homeowner Truman can be held liable to Miguel for his uninsured injuries, the judge ruled.

Workers compensation coverage adds considerable cost to job overhead. These expenses could be the cause of wide variations in prices between contractors who follow the standards versus those who choose to ignore them. Uninsured movers who do not carry insurance will most likely be cheaper to hire as they do not have insurance premiums to pay. Workers compensation premiums can increase wage costs from about 20% to as much as 100%, depending on the state.

There are a variety of reasons why full insurance may not be carried by a contractor, such as:

  • Not a full-time mover
  • New in the business
  • Simply wants to cheat to underbid his legitimate competition
  • Can't afford insurance premiums
  • Doesn't stand behind their work

It is up to the homeowner to determine if it is worth the risk to hire a moving company who does not carry insurance.

Christopher Noblit is a principal of Avatar Moving Systems -, a board member of the Long Island Moving & Storage Association -, and was a past vice president in charge of Website development at CD&R's Internet startup "Moveline" - Chris is also the creator of Moving 101 -, and is the creator and moderator of the moving & storage email discussion group known as the "AMS-Forum", located at

You can contact Chris by sending mail to or by calling (516) 983-6345.

Chris Noblit releases this document to the public domain and relinquishes any "rights of ownership" to this content. Furthermore, Chris Noblit encourages anyone wishing to do so to copy the content contained herein and to display and/or distribute it freely as they see fit. This release is subject to the condition that you may not change, remove, or modify the content of this document.

Revised 2-23-2003