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November 12, 2019
You officially become an employer when you hire a nanny to help care for your children. By its very nature, the relationship is personal, even familial, and people easily overlook the employer/employee aspect. However, it’s important to know how a nanny increases your risk exposure and how your personal insurance can help you manage those risks.
Your nanny drives your children as a part of her duties. Here are three considerations:
An umbrella policy is designed to protect your assets, financial security, and lifestyle in the event of a rare-but-severe liability claim. It could come into play if your nanny causes injury or damage to others while she is on the job. The most likely scenario involves a severe auto accident. You could also be held liable if a friend’s child is seriously injured during a playdate supervised by your nanny. When you hire a nanny, review your umbrella limit and determine if it should be increased.
You may consider your nanny a member of the family, but she is an employee who 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. Coverage often includes reputation protection, which pays for the services of a public relations firm if your nanny goes public with her allegations.
You may be legally required to provide workers’ compensation coverage for your nanny’s injuries on the job. Requirements vary from state to state, but your insurance broker can advise you and help you obtain coverage if needed.
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 opportunity for theft, from minor pilfering to major crimes.
Most people develop close, trusting relationships with their nanny and the experience creates fond, lasting memories for all. However, it’s important to recognize your role and responsibilities as an employer, and protect your financial security if there is an unfortunate accident or the relationship goes awry.
Our insurers offer services that help clients perform their employer responsibilities efficiently and professionally. These include background checks for prospective employees; interviewing tips; and advice on crafting documents — employment agreements, employee manuals, and confidentially agreements.
The views and opinions expressed within are those of the author(s) and do not necessarily reflect the official policy or position of Parker, Smith & Feek. While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it.