How to Make Sure your Nanny has the Right Insurance Coverage (The Coverages and Limits they Need)
Who knew 2020 would yield such a hot job market for nannies?
At Berry Insurance we’ve received more inquiries than ever this year (way more, in fact) from parents looking for insurance coverage for nannies they are hiring to care for their children during remote or hybrid learning, or periods of quarantine.
We’ve also heard many of our clients casually mention they’re hiring a nanny, to which we informed them they would need insurance for that.
Because the thing is, not a lot of people even realize they need nanny insurance. Many assume
they have the necessary coverage through their homeowner’s insurance, but that is not the case.
These clients become even more shocked when we ask them about what type of insurance coverage their nanny has.
But the truth is, you need to make sure both you and your nanny have adequate insurance coverage to fully protect yourself, your children, and them in worst-case scenario situations.
Below, we’ll outline the types of policies and limits you may want to make sure your nanny has, as well as remind you of what you need for nanny coverage.
Types of insurance nannies should have:
So you have your “nanny insurance” workers compensation policy established and covering the new nanny you hired -- you should be all set, right?
Well, maybe not.
Before you entrust your children with their new nanny, you may want to make sure they have certain coverages, as well as high enough limits on those policies to protect themselves, your children, and you.
Personal liability insurance
Personal liability insurance, a coverage on home, renters, or condo insurance, covers the cost of damage or medical expenses and any fees/settlements if you cause someone else injury, or cause damage to someone else’s property.
Since your children will be spending a lot of time with this nanny, and your nanny will be spending a lot of time in your home you want to make sure he or she has personal liability insurance that will cover injuries to your children or damage to your home.
As a parent, I’m sure you know caring for children can be unpredictable. What if your nanny is playing with your child and accidentally breaks something expensive or causes an accident leading to damage?
What if they are trying to discipline your child and accidentally injures them?
Anything can happen, so you need to make sure your nanny 1) has insurance with personal liability coverage, and 2) has adequate personal liability limits.
We usually recommend someone have $1 million of personal liability coverage.
If your nanny does not have personal liability coverage, or does not have adequate coverage, the medical expenses or property damage might not be covered, and if you wanted it paid for, you would have to sue him or her, which you obviously don’t want to do.
Personal injury coverage
Personal injury coverage covers the cost of libel, slander, or defamation lawsuits.
This coverage is optional, but if it is important to you, you might want to suggest your nanny have it on their home, renters, or condo policy.
While it may not seem necessary, in today’s litigious society anything can happen.
What if your nanny were to say something at a playdate that someone else misheard or claimed was inappropriate? Having this coverage could protect your nanny (and you) if sued.
We usually recommend someone have $1 million of personal injury coverage, which is actually a surprisingly cheap coverage to add on to a home, renters, or condo policy.
Optional bodily injury coverage
Will your nanny be using their car at all to run errands or drive the children?
If the answer is yes, you’ll want to make sure your nanny has enough bodily injury coverage on their auto insurance policy.
This portion of an auto insurance policy covers injuries the driver causes to another person. That means if your nanny caused an accident that injured your child, the bodily injury coverage would be what covered the medical bills, so you’ll want to make sure they have enough.
Every Massachusetts car insurance policy has bodily injury coverage with the limits of $20,000 per person and $40,000 per accident but it only covers accidents in Massachusetts, doesn’t cover passengers (so it wouldn’t cover your child) and it doesn’t offer nearly enough coverage considering the high cost of medical expenses in today’s world.
We recommend any nanny purchase optional bodily injury coverage with limits of at least $100,000 per person and $300,000 per accident.
What if the nanny is driving my car?
If the nanny won’t be driving their car, but will be driving your car, then you need to make a change to your insurance.
You should add them as a driver to your insurance policy to ensure coverage if there were to be an accident when they are driving.
While you’re at it, you should make sure your auto limits are high enough to cover any potential accidents. An independent insurance agent can review your policies to make sure you have the amount you need.
Make sure you have what you need too
But before you worry about your nanny’s insurance, you need to make sure your own ducks are in a row.
If you don’t already have it, you are required to have a nanny insurance policy.
When we mention “nanny insurance,” at Berry Insurance, we are usually just referring to a workers compensation policy.
Workers compensation covers compensation for medical bills and lost wages for any employees who get hurt or suffer a work-related illness on the job. It generally also includes employer’s liability insurance, which covers associated costs if an employee claims their employer’s negligence caused their injury.
In Massachusetts, if you employ a nanny or au pair working more than 16 hours per week, you are required to get workers compensation insurance for them, even if you only pay them with cash.
If you employ a nanny who doesn’t work 16 hours per week, you are not required to insure them, but you still should because if they get hurt on the job, they can come after you directly to pay for their expenses.
For each nanny that works for you, the base charge is $141 per year. (With fees and state assessment charges, the total cost for one nanny on a $1 million workers compensation policy is $286.)
Reinforce your policy and your nanny’s
Trusting someone else to care for your children can be stressful, but ensuring you and your nanny both have the right insurance to provide coverage in emergency situations can hopefully relieve some of your stress.
After you get your worker’s compensation policy, you should make sure you are comfortable with your nanny’s insurance. We told you what coverage and limits to look out for in the article, but if you would like to have another set of eyes look at it for extra reinforcement, feel free to reach out. At Berry Insurance, we review insurance for nannies and employers of nannies all the time (especially this year).
While you're at it, it may be a good time to review all of your personal insurance. We don’t want to give you something else to worry about, but every time you bring someone else into your house, your chances of having an insurance claim increase, so you should always make sure your insurance is up to date and covering what you want it to. You don’t want to take any risks when your children are involved.