handyman injured on my property - Posted by Anne_ND

Real Estate Investing Real Estate Law
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Posted by John Merchant on August 13, 2003 at 09:05:31:

Frank

Safest course is to stay insured to the max, both personally & all entities covered, then let the insurance carrier & their lawyers worry about the intricacies, if & when one of your people has a wreck and gets you sued.

This is an area of great complexity, which plaintiff & defense lawyers fight about daily, and all a layman can do is stay insured. Or close up and stay home. Poor choice, but there it is.

One thing I’ve always recommended: when you make ANY change, let your agent know, in writing, by certified w/receipt letter, then let HIM/HER worry about what to do about it. This is their full time business, they’re taking your money, so let them deal with it.

If you have an employee do something for you, you would get get sued, should he/she have wreck, so just expect that and stay covered.

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handyman injured on my property - Posted by Anne_ND

Posted by Anne_ND on August 07, 2003 at 17:54:36:

First of all, I screwed up big time here and I know it. I’m posting this as a lesson to others as well as asking for ethical and legal advice.

An itinerant handyman who is a skilled carpenter and has done quite a bit of work for me in the past called me to ask if he could do some work for me- he’s on his last dollar.

I said sure, and he’s been doing the exterior painting on one of my rental properties. It’s the only house owned in my name (first one I bought before incorporating, I’m about to sell it).

He’s been storing his paint and ladders in an old garage on the property, and he stepped on a board that had a nail in it, the nail went into his foot. He went to the hospital, got an x-ray and a tetanus shot and they told him to stay off of it for a few days.

I’m NOT worried about getting sued. He’s a vet and the VA is paying his bills except for medicine. I knew going into this that because he has no liability insurance nor health insurance (other than VA) that there was some non-zero risk of his being injured, but frankly I took that risk because he’s done great work for me in the past (when he was working as an employee under a different contractor) and he really needed the work. Also he does great work and was charging me a very reasonable $12.50/hr.

I plan to reimburse him for the $38 tetanus shot, which is so far his only medical cost out of pocket. I told him to take as much time as he needed before coming back on the job.

What else should I do? As I said, I know he’s not going to sue me, but if he were to, I have a $2M personal umbrella policy as well as a policy on the house itself. Next step is to go over there and get rid of the boards in the garage. What if he’s unable to work for a while? I don’t want to do anything to admit liability such as give him a check, but I’m willing to give him some cash to help him out.

I’d be interested in any opinions, legal or otherwise. I’ve got a call in to my attorney and hope to hear from him in the next few days (he’s on vacation). As I said there’s no immediate legal problem, but I want to do the right thing by this guy.

Anne

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Followup for those interested - Posted by Anne_ND

Posted by Anne_ND on August 12, 2003 at 09:51:31:

Thanks to John Merchant for the good advice. Here’s what I did and what the fallout was.

My insurance agent was on vacation. My attorney and his entire office were on vacation. The two other RE attorneys I’d used in town had either quit or been fired. So I called a large firm that was the first one listed under real estate.

I was told that if I got a letter from the injured party saying he would not sue me (release of liability) it would be worthless unless it had been signed 30 days AFTER the incident.

Telling the insurance company would raise a red flag, but would protect me in case the injured party decided to sue months or years down the road.

My insurance agent confirmed this- I decided to tell her, and she said my premiums would not go up, nor would I get dropped, but there would be a permanent red flag against the property and against me. I’m okay with that since I don’t plan to ever buy or insure properties in my name again.

Since it’s unlikely we will get a claim on this event I decided to come clean with the insurance agent in order to find out what I should do in the future. We want to use this handyman again in the future, so I’m going to pay for his liability policy. He has health ins under the VA.

Anne

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Re: handyman injured on my property - Posted by John Merchant

Posted by John Merchant on August 07, 2003 at 18:34:14:

You should call & report this to your P & C ins. co. NOW! Anything you do or promise to do seriously compromises your rights to collect from your ins. co., and they own ALL rights to your defenses, etc.

I’ve seen too many cases where the policy holder tried to work it out alone, without reporting it to his ins. co. and the ins. co. then refused to pay the claims, as they said the policy holder had waived his rights to their coverage, defense, etc. because he had tried to do it alone.

You shouldn’t even be talking to the guy as this is what you pay premiums to have your ins. co do. And you don’t dare pay him, or make any agreements with him.

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Re: handyman injured on my property - Posted by Anne_ND

Posted by Anne_ND on August 08, 2003 at 10:40:25:

Thanks for your response John. I have spoken to my local attorney and informad my insurance company.

Anne

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Re: handyman injured on my property - Posted by Jasonrei

Posted by Jasonrei on August 09, 2003 at 13:36:20:

Anne, I’m curious, what type of insurance do you carry. I do rehabs and would like to see if what you do is something I should do. I carry builders risk policies on my rehabs. An umbrella policy is something I’d like to carry, but my insurance guy isn’t being clear about what I need or why I need it.

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You need smarter agent! - Posted by John Merchant

Posted by John Merchant on August 09, 2003 at 17:07:18:

A good P&C agent would know what you need, and yours clearly is NOT one. Shop around and find somebody who does understand RE.

I used to have a dumb agent who’d argue with me that I did NOT need business coverage for my auto, which I used in going back and forth to courthouse, taking clients and witnesses…I finally wised up and fired him and got somebody with some brains.

If I’d had a wreck, that was my fault, and a business passenger was injured, it I had NOT had business coverage, my company would have denied coverage and left me out swinging in the wind without insurance.

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Re: handyman injured on my property - Posted by Anne_ND

Posted by Anne_ND on August 09, 2003 at 14:58:57:

Jason,

Each property has it’s own hazard insurance that includes liability. Our property management company carried a separate liabiliy policy. I have my own personal umbrella policy. This house had already been rehabbed, has been rented out for 3.5 years, but we decided to have the exterior painted.

Anne

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Business Use of Car - Posted by Frank Chin

Posted by Frank Chin on August 13, 2003 at 07:30:57:

Hi John:

A quick question while we’re on the subject.

I send employees of my business in their personal cars to run errands, such as making bank deposits, picking up parts, and occasional deliveries.

Asked my business Insurance guy about it, and he told me not to worry.

I have an old personal car (86 Honda) that I was thinking of transferring to the business. The reason is I’m paying personal liability of $1,200/year in NYC.

I’m told business liability is around $3,000/year, and I have to submit driving records of employees who’ll be driving. At least I’m covered. So another $1,800/year is not a big deal.

The other way is for me to personally run the errands (like to the bank), though technically its for business. I know one question they ask is “where were you going” in accidents. The answer “I was on the way to the Bank” does not reveal whether its for personal or business.

And yes, I occasionally drive employees around on business.

Then, one the sneaky way is to have my employee drive our customer’s car on errands as that is covered as the business is an auto shop.

Another complication is I sometimes send employees around on my REI business, that I operate under another Corporation for REI.

Any comments??

Frank Chin