As a household employer, hiring a nanny involves more than just agreeing on pay and duties—it also includes understanding your legal and financial responsibilities. One of the most overlooked aspects is insurance, specifically nanny insurance, which provides important safeguards for both the employer and the caregiver. In this guide, we break down the essentials of nanny insurance, including what it covers, how much it costs, and why it matters.
What Is Nanny Insurance?
Nanny insurance typically refers to the policies you need as a household employer to protect yourself and your nanny. This can include both employer-side coverage (for liability, workers’ compensation, and employment tax compliance) and nanny-side protection (such as theft insurance or personal property coverage).
Why Do You Need It?
Household employers face unique risks. For example, if your nanny is injured on the job, you could be liable for medical expenses—unless you have the proper coverage. Likewise, workers’ compensation is required in most states for household employees. Without it, you might face fines, lawsuits, or denied claims.
Types of Coverage to Consider
Workers’ Compensation
Required in most states if you pay your nanny more than a certain threshold. It covers lost wages and medical expenses if your nanny is injured while working.
Liability Insurance
Protects you if your nanny claims injury or harm on the job that you could be held responsible for.
Employment Practices Liability Insurance (EPLI)
Covers claims of discrimination, wrongful termination, or harassment from your household employee.
Theft and Property Coverage
A lesser-known add-on, this can cover losses of personal property by your nanny’s action (such as “nanny theft insurance”).
Pricing and Cost Factors
Prices vary based on the type of coverage, state requirements, nanny pay rate, and duration of employment. Here’s a general breakdown:
| Coverage Type | Average Annual Cost | |
|---|---|---|
| Workers’ Comp | $200 – $1,000 | Based on wages and state |
| EPLI | $200 – $800 | |
| Theft/Property Coverage | $100 – $500 (addon) |
*Estimates based on industry averages; actual costs may vary.
What Affects Price?
- State regulations
- Your nanny’s hourly or annual wage
- Number of hours worked
- Credit scores or insurance history
- Add-ons like additional property coverage
How to Get Coverage
Many employers purchase nanny insurance through specialized household employer platforms that bundle services like tax filing, payroll, and insurance. Some common providers include:
- NurtureCare
- Household Employment Advisor
- HomeWork Solutions
It’s wise to compare quotes and ensure the provider is reputable and experienced in household employment insurance.
Tips for Choosing the Right Policy
- Assess your state’s requirements first — workers’ comp might be mandatory.
- Bundle where possible to save on costs via household employer service providers.
- Read the fine print to understand coverage limits and exclusions.
- Consider liability riders if you already have homeowners insurance.
Final Thoughts
Nanny insurance may seem like an extra expense, but it’s a crucial safeguard that protects both you and your caregiver from unexpected risks. By investing in the right coverage, you can focus on what matters most—building a trusting relationship with your nanny—while minimizing legal and financial exposure.