Do you need insurance for your nanny?

nanny insurance

Updated

Once you hire a nanny, or other type of in-home caregiver, you become that person's employer. And as a household employer, there are several human resources-related items to manage, such as payroll, taxes and even insurance. It may surprise you that insurance is on the list, but it’s important to look into the types of coverage you may need to protect yourself and even stay compliant with the laws in your state.

 

What types of insurance do you need? And how do you find it? You don't want to leave your family or your nanny vulnerable, so consulting with a good insurance agent is essential. Depending on you and your nanny's needs, the following three types of insurance may be a good idea to have:

 

  1. Health insurance

You aren't required to provide health insurance for your nanny, but many families contribute funds to their nanny’s plan, in line with what most businesses and employers do. You can enroll your nanny in a plan via the Small Business Health Options Program and have the bill sent to you or agree with your nanny to have a portion of their payroll dedicated toward a policy of their choice. In the case of the latter, it's a good idea to ask your nanny for a statement proving they’re using the money for health insurance. "You don't need to ask about doctors or disclosures, just ask for the monthly bill," says Lisa Weinberger, a California attorney specializing in employment law and founder of the Law Office of Lisa Weinberger.

 

Learn more about how health insurance works for your nanny.

 

  1. Workers' compensation insurance

Families in the majority of states are required by law to carry a workers' compensation insurance policy. Use this list to check if it’s mandated in your area. Required or not, you should obtain a policy because if your nanny is injured and you don’t have coverage, you may be financially liable for their medical bills and lost wages. What injuries can your nanny get on the job? They could fall going down the stairs or be injured while playing at the park with your child.

 

Workers' compensation protects you in these instances because you won’t have to worry about paying out-of-pocket for your nanny’s expenses, be sued for an on-the-job injury or potentially face fines for not having coverage. And as for your nanny, they will have quick access to needed benefits and will be paid through your insurance provider while they recover. That means you can use the money you’d normal pay to your caregiver to hire temporary back-up care until your nanny is healthy enough to come back to work.

 

Your state can provide you with a workers’ compensation policy, but so can many private insurers. Care.com HomePay even has a solution called HomeStaff Protect, which offers free quotes and coverage in nearly every state.

 

  1. Car insurance

Depending on how much your nanny drives and what vehicle they operate will determine if you need additional auto insurance. If your nanny drives your kids in your vehicle on a regular basis, you may need to add them to your insurance policy and increase your liability coverage. In this instance, it’s a good idea to contact your insurance provider and make sure your policy adheres to the minimum requirements in your state.

 

If the nanny drives your kids in her car, it’s standard practice to reimburse for mileage at the current IRS rate of 58 cents per mile. This is meant to cover gas and general wear and tear on your nanny’s vehicle. Your nanny should ask their insurance company if regular travel with your kids in her car will require additional coverage. If this is the case, many families opt to cover the additional fees associated with altering their nanny’s auto insurance policy.

 

The peace of mind you gain by having adequate insurance coverage is well worth the effort and money. No one ever wants to think about something bad happening to their nanny while they’re caring for their children, but if it does, it’s important to know you’ll have the support system in place to handle it.

 

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Parent needs caregiver

My parents are in a facility. I want to hire a private individual to come and provide companionship and caregiving. They say I need workers comp and general liability for this individual. How do I purchase this? Thanks
March 17, 2016 at 6:58 PM
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Amruta K.

Hi, I am planning to hire a housekeeper for an hour on weekdays(Monday to Friday). So total week hours would be 5 hrs and at most 7-8 hrs if it takes more on some days...I am planning to pay hourly.She is the only one working for me. Do I need to worry about providing insurance to her?
March 19, 2015 at 3:24 PM
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Tom B.

Hey Callie. As I mentioned to Lynn, I'm not 100% sure if an employee needs to carry general liability coverage to perform their job. You should contact an insurance company to get clarification on this subject.
February 18, 2015 at 5:32 PM
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Callie M.

Hello, I was hoping to get a little advice. I want to move to full time nannying, but a family member brought it to my attention that I should have some protection for myself; God forbid my employer and I would be on the outs. If they were to try to sue me, what kind of insurance do I need to have on myself?
February 18, 2015 at 3:20 PM
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Tom B.

Hello Lynn. Some caregivers choose to have general liability insurance, but these people most often independent contractors performing nursing duties. I'm not 100% sure if an employee is able to carry this type of policy. I would speak to an insurance agent and see if this is something worthwhile for you to purchase.
February 12, 2015 at 5:07 PM

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