Your Nanny and Insurance

Whenever you have domestic employees, there are additional risk exposures that need be taken into consideration. A nanny may be your only domestic employee and so you may not have given much thought to “insuring your nanny.” Here is a quick guide that outlines how a nanny can increase your risk exposures and the insurance coverages that can help you manage them:

Automobile

Your insurance will be primary if the nanny drives your autos. Add her to your policy as a driver. (We will need her full name, date of birth, and license number.) Her insurance will be primary if she drives her own auto as a part of her job responsibilities, but you could be named in a lawsuit if her liability limits are exhausted by a claim. Keep in mind that many people, especially young adults, carry only the minimum limits required by law, which can be woefully inadequate.

Excess Liability

Your Excess Liability coverage could come into play as a result of your nanny’s actions that cause injury or damage to third parties while she’s on the job. Likely scenarios include injury to your child’s playdate while under the nanny’s care or a severe auto accident while driving your auto. Once your policy limit is exhausted, the Excess Liability policy will respond. (Keep in mind that even if your nanny is driving her own auto, you could be named in a lawsuit and your Excess Liability coverage could come into play.) You may want to review your limit now, in consideration of the increased exposure of a domestic employee.

Employment Practices Liability

Families often develop close, trusting relationships with their nannies and the experience is a positive one that creates fond, lasting memories for all. However, the nanny is an employee and can file a lawsuit if she believes that she has been treated unfairly. EPL coverage protects you against allegations of wrongful employment acts, including discrimination, sexual harassment, and wrongful termination. Coverage includes defense costs, even if you are falsely accused. The coverage often includes reputation protection, which pays for the services of a public relations firm if your nanny goes public with her allegations.

Worker’s Compensation

You may be legally required to provide Worker’s Compensation coverage for your nanny’s injuries while on the job. Requirements vary from state to state, but we can advise you and help you obtain coverage if needed.

Theft

A nanny is an especially trusted employee since she is charged with the safety and well-being of your children. Ironically, that very trust creates an opportunity for theft, from minor pilfering to major crimes. Insure your jewelry, fine art, and collectibles on a Valuables policy, which includes coverage for theft and mysterious disappearance with no deductible. Be sure that your homeowner policy includes coverage for Identity Theft, which will pay for expenses you incur as a result of identity fraud.

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