If you are someone who is around small children often, you know all too well that accidents happen. None of us are immune.
Employing a nanny carries with it some risk of accidents happening – both for the nanny AND for the family. When an accident occurs while on the job, the family is usually liable.
Examples of risks to the nanny involve driving the children around in the car, accidents during outings (like being bitten by a dog while visiting the park), etc. Some scenarios of risks to the family may include any liability involving the nanny getting into a car accident while on the job or having another child injured in their home (as with a nanny share situation).
Most families attempt to reduce the risk of these types of events occurring by thoroughly checking the care provider’s references, background, driving history, etc. Another way to lower this risk is by ensuring that adequate insurance coverage is in place.
Imagine the following scenario:
Your nanny is getting ready to leave the parking lot after taking your kids to swim practice. Everyone is buckled and ready to go. She checks to see if there are any cars coming. There are not, so she puts her car in reverse and begins backing out of her parking spot. Unbeknownst to her, another car is driving much too quickly through the parking lot. The nanny does not see the other car and the other driver cannot stop in time. The two cars collide, and in the process both drivers sustain whiplash injuries.
In this scenario, it’s possible that both drivers may be at fault.
But what happens if the nanny can’t work as a result, or if her car cannot be used for work for several weeks while it is getting repaired?
Is the nanny’s insurance adequate to cover both medical and property damages if the other driver sues the nanny?
Is the family employing her liable for damages caused while she is on the job?
If the family employing the nanny had purchased Worker’s Compensation Insurance, the nanny’s lost wages and medical care would be covered under that policy. This type of insurance is not required to be carried by an employer with only one household employee in Washington State – it’s considered elective.
It’s a good idea to consider purchasing Worker’s Compensation Insurance if you do employ a nanny. And it’s relatively affordable. In Washington, expect to pay about 1.39% of the nanny’s payroll for worker’s compensation insurance. If your nanny is earning $3,200 per month gross, you will pay about $45.00 per month for coverage.
If this coverage is absent in the above scenario, the employer may be liable for covering any medical expenses that the nanny’s car insurance does not cover. As we all know, medical expenses can add up quickly!
What if the nanny had been driving the family’s car in the above scenario?
In that case, the family’s insurance coverage would kick in to cover medical expenses and property damages.
So, how can you protect yourself? Navigating all of the different insurance coverages can be rather mind-boggling. Talking with your insurance agent is a great place to start. They likely won’t have information about Worker’s Compensation Insurance – contact the Department of Labor and Industries to learn more about that – but they can answer your questions and help to ensure adequate insurance coverage for your individual situation.
I contacted my local State Farm office – the office of Melinda Elkin in Greenwood – and spoke with Sherrie to learn more about the coverages both nannies and families should consider. (Some of the answers are specific to State Farm and may vary with other insurance companies.)
Question #1: What special coverage should a family purchase when the nanny drives the family car?
State Farm needs to get some information about the nanny, including her Social Security Number, Department of Licensing number, and her date of birth. The nanny is then rated and becomes a household driver on the family’s existing policy. However, as long as she has permission to drive the car, the coverage with State Farm extends to the nanny’s use of the vehicle. This is acceptable for occasional use, but definitely add the nanny to your policy if they are using the car on a regular basis.
Question #2: Should a family purchase any additional coverage when the nanny is driving her own car?
Parents should ask the nanny for proof of insurance and look over her existing coverage. Parents may ask or require the nanny to increase coverage amounts. (If this is the case, the parents should reimburse the nanny for the increased amount on his or her auto policy.)
If the nanny is involved in an accident driving her own car, the parents might have some liability in that case. Parents could consider an additional liability policy that they can purchase for any potential liability that may be directed at them (like if another motorist sues the nanny beyond her own policy’s limits). A one million dollar policy is about $50.00 per year w/ State Farm.
Question #3: What special coverage should the nanny purchase when using her own car for work?
The nanny’s insurance does cover any kids in the car – but both the nanny and the family would want to make sure liability coverages are adequate and the car is named as being used for work purposes. There is no additional cost for this coverage with State Farm*.
* It’s important to note that some insurance companies WILL NOT provide coverage for the nanny using her own car for work, if the nature of her work is that she’s driving other people’s children around. Nannies should check with their insurance company to find out about this coverage.
Question #4: What additional coverage should the family consider when working with a nanny in the home, if any?
Washington State does not require worker’s compensation insurance to be carried by household employers with only one employee (like a family employing a nanny). If you didn’t choose to purchase this coverage, your homeowner’s coverage would pick up for any injuries or property damages. Purchasing an umbrella policy would extend the amount of liability coverage, if needed. If some of the nanny’s property is damaged or stolen while at the family’s home, her property would be covered under her own homeowner’s or renter’s policy.
Question #5: What insurance considerations should be made when a family is hosting a nanny share and will regularly have another family’s child in their home?
A family’s homeowner’s policy would cover these situations. These policies include medical coverage, although they are limited. The liability portion of the homeowner’s insurance may pick up anything additional. If the other parents sue, it would be against the homeowner’s insurance. An umbrella policy is always a good idea to consider for extra protection. The price of an umbrella policy depends on many different factors. There must be an auto, homeowner’s or renter’s policy in place first before you can get an umbrella policy. If vehicles are insured somewhere else, there can be as much as a 50% markup on the policy.
When a nanny and a family are beginning their working relationship, insurance is one of the topics that MUST be addressed by both the nanny and the family. This helps to ensure ample protection by all parties involved in the unfortunate event of some sort of accident. It’s important to remember that the nanny and family are a TEAM, and discussing and agreeing upon things in a contract at the beginning of employment will help to facilitate the best working relationship possible!
After completing my research for this post and looking at my family’s insurance coverages, the Mr. and I have decided to purchase either Worker’s Compensation Insurance or an umbrella policy for when we employ a full-time nanny again.
What have you done? Or plan to do? Comment below!
If you employ a nanny and would like to apply for Worker’s Compensation Insurance, you must complete and return an Application for Elective Coverage. You can contact the Department of Labor and Industries Employer Services Help Line at (360) 902-4817 to learn more.