Summary
When you hire a nanny or other caregiver to work for your family in your home, careful attention must be paid to the appropriate insurance coverage to protect all parties involved. It's not as simple as relying on your existing homeowner's insurance policy to provide the insurance that is inevitably needed.
The minute you hire a live-in nanny, arguably, you become an employer and you take on associated responsibilities. While you have plenty of options for the types of benefits to offer your children’s caregiver, insurance coverage should be at the top of your list. Various types of insurance are appropriate for employers who hire live-in nannies including workers’ compensation, employment practices liability insurance, and umbrella insurance. Here’s a look at each of them:
Workers’ compensation
This coverage pays for medical costs, hospitalization costs, emergency care, and ambulance fees if the nanny suffers bodily injury while caring for your children. Workers’ compensation will also cover a portion of your nanny’s lost wages. Worker’s compensation may be required in your state if you hire a nanny. You can check your state’s workers’ compensation laws at Forbes.com.
Auto insurance
If your nanny will be using one of your vehicles, you must add them as a driver to your auto insurance policy. Your nanny can occasionally use your car if they use it infrequently (less than 12 times per year). The nanny may use their own car and car insurance if that’s what you agree. Another alternative is for the nanny to use a rideshare service or public transportation.
Employment practices liability insurance (EPLI)
EPLI covers you as the nanny’s employer if the nanny sues you for wrongful employment practices. Wrongful employment practices refer to allegations of discrimination, wrongful termination, sexual harassment, invasion of privacy, emotional distress, breach of contract, or labor violations. You may be able to add EPLI coverage to your workers’ compensation policy for an additional fee.
Personal-liability (umbrella) insurance
An umbrella insurance policy is an excess liability policy that covers more than the underlying limits of liability on your home and auto policies. Insurers generally provide coverage in increments of one million dollars.
Depending on your circumstances, you may need one or all the coverages listed here. The most important things to consider are protecting yourself, your children, and your nanny with both legally-required coverages and those additional coverages that give everyone important peace-of-mind. Consult a dedicated advisor at Notable Risk to build a reliable program for your family.
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