Do you need insurance for your nanny?

nanny insurance

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. 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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Lynn M.

I have a question...I was hired as a nanny only, for a lovely family and have found myself as an elderly caregiver kind of by default. My employer is filing taxes for my wages, so everything is on the up and up. My question pertaines to this....due to the age and health of the grandmother, should I carry some sort of insurance to cover myself, should, God forbid, someting should happen to her or one of the children, while i am on duty. It would be a rare thing, but accidents happen and she is almost 81 and has a bad leg and moderate dementia and has stairs to climb numerous times a day. I know that things could get ugly very fast if something like that happens, and I just want to protect myself, so I don't lose everything I own. I haven't had much luck finding anything regarding this oin the internet. Thanks so much! Lynn
February 12, 2015 at 8:53 AM
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Tom B.

Hello Jennifer. I'm so sorry to hear you're having difficulty finding an answer to your question. Unfortunately I'm not an expert in commercial taxes nor a licensed insurance broker, so I'm unable to help you. It may be useful to contact an attorney since the insurance brokers have not been helpful. I wish you the best of luck with this endeavor Jennifer.
December 03, 2014 at 5:55 PM
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Jennifer M.

Hi Tom B. I live in Maui, Hi. I no longer work for my local on island agency and have created my own business. I am the owner and nanny providing childcare services. My question is: Why can't I get a business liability insurance policy (bonded 1 million/2million) to be able to work at the Resorts, private condos, homes, jets, yachts, etc as a private nanny? As I've been told... The only way I can be insured is if I start my own nanny referral agency with an annual $3500 policy in which I have no interest in doing. I have searched the Internet, called my local insurance companies, called out of state agencies, and NO ONE will give me an answer that makes any sense. What do I have to do to write up an insurance policy covering me as a private nanny just the same as a subcontractor, a wedding photographer, etc. would need to run their business on a private property? Thank you for your time. I hope you can help. Mahalo, Jennifer McConnell
November 24, 2014 at 7:27 PM
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Tom B.

Hello sweet. I'm Tom Breedlove, Director of HomePay and I can help answer your question. Additional liability for car insurance falls out of the scope of payroll and taxes, so I would place a call to your insurance agent and get his/her recommendation. It's possible that you won't need to do anything and rather it would be the responsibility of your employer to increase their policy.
November 18, 2014 at 3:05 PM
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what of liability insurance do i need to have in order to pick up and drop off kids. i do have liability insurance for my car but i was told that is not enough. please help if i need an extra type of insurance. where do i get more info about it
November 15, 2014 at 2:02 AM
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Stephanie B.

Hi Bryanne! Most states don't actually require families to reimburse their nanny for miles driven on the job. We always suggest they do though because it's a nice thing to do for the nanny. The federal mileage reimbursement rate is 56 cents per mile and it's designed to cover gas and general wear and tear on the car. I'm not sure how much driving you do, so I don't know if $14 per week translates to 56 cents per mile in your particular situation. In terms of the insurance coverage, it's best for the family to speak to their insurance carrier to determine if their range of coverage is sufficiently covering any accident you may get into.
July 02, 2014 at 12:53 PM
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Bryanne J.

Car insurance--- "If the nanny drives your kids in her car, you should pay her mileage to cover gas, insurance and maintenance" I nanny for 2 girls 14 hours a week and pick them up from school, take them to the park, along with taking them to whatever activities they have that week. Around much insurance and maintenance is my employer supposed to be giving me? Is there a calculator for it? It has been almost a year with the family and she has only offered me $1 an hour for gas money ($14 dollars a week for gas.)
July 01, 2014 at 12:41 PM
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s shetty

my daughter will be driving kids from their camp to their house which is 8 miles away. as a family we do have a lot of assets .what type of insurance should i have for my car which my daughter drives .
May 06, 2014 at 1:50 PM
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Stephanie B.

Hi Wilma! I'm going to start off by saying I'm a household payroll and tax expert, not an insurance expert, so for an absolute definitive answer, you should seek out an insurance agent. That being said, in the 20+ years I've been working with families and nannies, I've never heard of a family successfully suing their nanny because the kids got hurt under their watch. Accidents happen because kids are unpredictable and the families themselves understand that because they spend more time with the kids than the nanny does in most circumstances. Most often, if something occurs that the family is upset about, they just fire the nanny. And if something truly egregious happens under the nanny's watch, it's probably considered criminal negligence anyway and an insurance policy won't protect the nanny under that circumstance. So in my opinion, there are very few circumstances where I believe personal liability insurance would come into play for a nanny.
March 06, 2014 at 1:19 PM
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Wilma W.

Does the nanny need to carry liability insurance in case something happens to the children she is watching?
March 03, 2014 at 3:52 PM
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Stephanie Breedlove

Hi Anne, My team at HomePay helps families obtain workers' compensation coverage along with setting up and managing their household payroll. What we've found through research and experience is that most liability insurance will only cover claims due to negligence ie the cleaning lady falls down the stairs because the banister is loose. Injuries resulting from normal day-to-day duties are most likely to be rejected by the insurance company unless you have a workers' compensation policy. But as you mentioned, not everyone is required to have a workers' compensation policy, but if something happens to your employee, you'll be glad you have it.
October 01, 2013 at 12:05 PM
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Anne T.

I have investigated this question with my insurance and my cleaning lady's and the conclusion is that our liability insurance covers us in case something happens while she is working in the house. If she hurts herself her medical expenses would be covered. In North Carolina you only need workers' compensation insurance if you have 3 or more employees and the cost is very high if you employ someone for just a few hours a week. So better to do a thorough check before jumping right into subscribing workers' compensation insurance
October 01, 2013 at 9:33 AM
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Kristine T.

Worker's Comp only covers personal/bodily injury to the covered employee that was injured at work. So no, your broken glasses are not covered. But if your glasses were broken by the kid and while picking up the pieces you accidentally cut yourself and needed stitches, then yes, your medical evaluation and treatment is covered. If the carpal tunnels was caused because of an incident at work, then it is *possibly* covered - the claim company would have to find that it occurred because of work. If you are injured while on duty, it is covered. Be aware, that you would need to go to a worker's comp provider to get evaluated. Some doctors do not see or file worker's comp claims.
August 31, 2013 at 1:16 PM
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Nicole T.

No. Worker's compensation covers your nanny in a case of an illness like Carpal Tunnel or injury.
July 14, 2013 at 9:54 PM
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Geovanna D.

That happened to me and I ended up paying out of pocket for them.
July 10, 2013 at 6:44 PM

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