Parents often form close relationships with their nanny, au pair, housekeeper or other residence employees who may even qualify as full-time employees and thus require workers’ compensation coverage.
However, they may not be covered under a homeowner’s policy because personal liability typically only extends to family members.
Homeowners Policy
Many families form strong bonds with the staff at home who take care of them – be they nannies, au pairs, housekeepers, gardeners or otherwise – that they come to feel almost part of the family. It’s understandable, since many stay for many years – attending weddings, anniversaries and other family gatherings along the way. When their contract comes up for renewal it can be devastating when that special connection breaks apart – particularly if comparable employment opportunities do not present themselves elsewhere – thus home daycare insurance becomes vitally important.
Homeowners policies often offer basic liability protection to at-home daycares through endorsement. This often provides some lost income protection if your home becomes unfit to provide daycare services, along with general personal liability coverage.
However, childcare centers usually do not qualify for coverage because their insurer may construe “family” in a different light than what you might consider family. An in-home daycare would most likely be considered a company or corporation which requires professional liability insurance policies instead.
However, personal injury protection (PIP) policies generally do not extend to anyone employed on an ongoing basis within your home – meaning if your teenager babysits for neighbors or friends occasionally it might not be covered.
As an exception, this rule can be broken if you employ home based employees who have signed an employment contract that defines their duties, wages and hours of work. Under such conditions, your home based business may be covered if these agreements and PIP policies are in place. It’s therefore vitally important that any home-based business be discussed with its insurance broker as soon as possible as well as carefully reading any specific policies to see where fine print lies buried within.
Auto Policy
Many families become very close with their nannies, au pairs, housekeepers, or other caregiving workers that they become like an extension of the family. Unfortunately, this closeness can create complications if a family hires these persons on full-time employment and pays them salaries before suddenly terminating them without cause – in such a scenario a nanny or worker could sue over unfair termination and potentially wipe out savings and equity in their home if successful in court proceedings.
Before hiring any worker, the best thing you can do is ensure they possess adequate insurance. For a professional nanny or babysitter, both professional liability and commercial auto policies should be purchased; as there are several insurers offering such policies it may be wiser to work with an independent broker who can offer multiple quotes from various providers and help find you the most cost-effective policy available.
If a nanny or caregiving worker will be driving your car during their duties, it is equally essential that their personal auto policy be checked. While most cases don’t present issues here, it is vital to review coverage limits to make sure they are adequate; furthermore if using their own car for transportation of children under their care it would be prudent for them to add a “business use” rider onto their personal policy for added protection.
Be mindful that adding an authorized user to your auto policy may result in an increase in premium, yet often worth the additional protection it affords. When considering hiring a nanny or other caregiving worker, make sure they have access to a safe vehicle with adequate coverage limits, and prepare to cover their own policy as an added layer of safeguards against misfortune for both yourself and their caretakers. For the sake of their children and themselves alike, always be overprotective of your policyholders – contact Insurance Advantage now for a consultation from one of our experienced agents today.
Workers’ Compensation Policy
If you are hiring a nanny, babysitter, housekeeper, gardener, or anyone else to work on your property, a workers’ compensation policy should be carefully considered. Such coverage provides benefits in case the worker is injured on the job and helps pay medical expenses and replace lost wages as a result of injuries suffered at work. Many states mandate workers’ comp policies for anyone working within private residences – if this requirement applies to you or you feel it would be wise for any domestic employee you hire through you then an online insurance broker offers quick quotes and purchase coverage quickly and conveniently through them!
Workers’ comp policies for nannies are relatively affordable, costing only several hundred dollars annually. With children being particularly susceptible to serious injuries, this insurance may help ease any anxieties regarding their safety.
Homeowners or renters policies offer liability and no-fault medical coverage that would apply to guests injured at the residence, although it usually only extends to immediate family members or household employees who reside at that address. Professional liability coverage on such policies typically only covers household employees.
When considering hiring a domestic worker or sitter, it’s essential that you understand how their employment status will impact your homeowners or renters policy. Depending on the nature of your relationship and frequency of their services rendered, additional coverage for them as an employee could be necessary or obtaining an independent workers’ compensation policy may also be required. Furthermore, an actual childcare center run by an employer (e.g. a parent) in compliance with certain state and local regulations regarding workers’ compensation will likely need its own specific professional liability policy in addition.
Business Personal Property Policy
Homeowners operating small daycares from their own homes will benefit from purchasing an additional liability and property damage coverage through a business personal property policy. This type of policy usually covers equipment, furnishings and assets used specifically to run their daycare – such as playpens, toys or safety gates – along with repair or replacement costs should these items become stolen or damaged.
Every reputable daycare should provide their employees with workers’ compensation insurance to protect them in case of work-related accidents or illnesses, which covers medical costs and lost wages as required by most states. Home daycare providers often need commercial auto coverage as well, since personal vehicle policies typically do not offer enough protection in this instance.
General liability insurance should also be in place at a daycare, to provide coverage in the event that a non-employee is injured on their premises – for instance if a child accidentally swallows poison from a kitchen cabinet left by their daycare provider and files suit, general liability would help cover legal fees and damages awarded against you by court.
Families often form close relationships with nannies, au pairs, housekeepers and gardeners employed by household firms. These individuals become an extension of the family at events where they may attend or even contribute. Unfortunately accidents do happen and if an incident arises which is not covered adequately by homeowners/renters insurance, personal liability policies should be considered separately to provide adequate financial coverage for these household employees.
Every in-home daycare operation should have business property and workers’ compensation policies in place in addition to nanny liability coverage. Contact Insurance Advantage now if you run such an operation out of your home; our experienced agents can find a suitable policy that protects against unexpected incidents that could occur while caring for children.
