Do You Need Nanny Insurance?

nanny insurance

Once you hire a nanny or other type of caregiver, you become that person's employer. And there are lots of fun HR-type things to think about, like payroll, nanny taxes

But what type (or types) of insurance do you need? And how do you find it?

We asked Stephanie Breedlove, VP of HomePay; Gary Stephenson, a State Farm spokesperson; lawyers Lisa Pierson Weinberger, founder of Mom, Esq., and Judith Galeano of Mowery Youell & Galeano, Ltd. in Dublin, Ohio, to explain the complex insurance coverage you need.

"People don't really see how anything could go wrong," says Weinberger. "They just don't anticipate it."

But you don't want to leave your family or your nanny vulnerable. A good insurance agent is essential, but they can't help you if they don't know your situation.

"A person should visit with their insurer or agent -- on the front end -- so that they understand their liabilities and the protection that would be appropriate," says Stephenson.

  1. Health Insurance
    Employers aren't usually required to provide a nanny's health insurance, but many either do or contribute funds to a private plan, says Weinberger. You can enroll your nanny in a plan and have the bill sent to you, but some nannies request a set amount of their salary to put toward health insurance. In that case, says Weinberger, ask her for a statement to ensure coverage, but don't pry. "You don't need to ask about doctors or disclosures, just ask for the monthly bill," says Weinberger.

    Learn how the Affordable Care Act can help »

  2. Liability Insurance
    Liability insurance provides coverage for bodily and personal injury inside your home, says Galeano, and "personal umbrella liability insurance" offers an additional layer of protection to your homeowner's policy. Specialized business liability insurance offers coverage for you as a professional nanny to protect you from lawsuits (injury to another child, for example), but not all companies offer it. Weinberger says you should investigate any policy to make sure it's reputable and that you know about any exclusions.

  3. Car Insurance
    If your nanny drives your kids, you need adequate insurance, and auto insurance requirements vary by state. If the nanny drives your kids in her car, you should pay her mileage to cover gas, insurance and maintenance, says Weinberger, but you don't have to pay any additional insurance fees. If, however, you want her policy to have more coverage than what she currently has, you'll need to pay the difference between the coverage she has chosen and the coverage you want her to have. According to Galeano, your nanny should ask her insurance broker about reclassifying her car insurance use from personal to business, as it will vary with each situation.

    If your nanny drives your car, add her to your policy. If she's driving your car and has an accident, your policy likely won't cover it otherwise. You don't need to pay her mileage when she uses your car, but your overall costs will include gas, maintenance and the extra insurance on your car.

    Learn more about How to Handle the Car Situation with Your Nanny »

  4. Workers' Compensation
    Workers' compensation insurance is administered by the state, but it isn't required by every state. (Use this list to check your state.) Required or not, you should get it. "This is one thing lots of employers don't think to do, but it is critical," says Weinberger. "If your nanny is injured and you have no policy, the employer is personally liable for any resulting damages."

    What injuries can your nanny get on the job? She could trip going up the stairs or get a dog bite while she's at the park with your child. "Those are workers' comp issues," says Weinberger.

    Workers' compensation protects both the employer, who won't be sued for an on-the-job injury, and the nanny, who will have quick access to needed benefits. HomePay offers HomeStaffPROTECT, a unique workers' compensation product for families with nannies, that streamlines the application process in many states. In other states, it can guide you to an agent who can personalize your policy. Call HomePay at 888-273-3356 to sign up.

If you're an employee or a nanny, you have the right to confirm policy coverage with your employer. It's a work issue, not a trust issue. And, says Weinberger, you can always say your lawyer or your insurance agent said you must have copies of that policy for your records. "If someone says, 'No,' that is a red flag," she says.

Julia Quinn-Szcesuil is an award-winning freelance writer and a mom to two girls. She lives in Massachusetts and has written for local and national publications.

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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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Natalie B.

Does a Workers Compensation Plan cover if the child mistakenly break the nanny's glasses?
May 16, 2013 at 12:36 AM

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