Hiring a nanny or au pair to care for your kids increases your personal risk – Are you fully covered?
Are you among the growing number of people who’ve hired a nanny or au pair to care for your children at home rather than using a day care facility?
If the answer is “yes,” can you state with certainty that the person you hired has totally adequate liability insurance covering any acts of carelessness that occur on your property or while driving your care?
And what if the caregiver is injured in your home? Does she―or you―have Workers’ Compensation insurance?
These are just a few of the important questions parents need to consider when hiring someone to watch their children in their home―whether it’s a full or part-time nanny, or live-in au pair.
A nanny is typically a U.S. citizen and many or many not live with the family. There is no limit on their length of employment. “Au pairs” are from a foreign country and hired through placement agencies under federal guidelines for one year, during which time they become “part of the family,” living in their home, even traveling with them.
Study the contract
When hiring a nanny or au pair through a placement agency, it’s important to read the employment contract carefully. In addition to the caregiver’s salary, you may be required to pay for their medical, dental, and vision care expenses.
Because most full-time caregivers are given access to the family vehicles to transport children, run errands or use in their free time, be sure to list them as a drive on your auto policies. Au pairs typically hold an international driver’s license, so consult your agent before granting them access to your vehicles. Your insurance carrier may require the caregiver to obtain a driver’s license issues in the U.S.
Determine if the caregiver has liability coverage for any negligence that occurs during the course of her employment―such as pain and suffering or lost wages resulting in family members who are injured by the caregiver’s carelessness. Ask the caregiver or the placement agencies are provided with general liability policies, but the limits may be low. Caregivers hired independently may have liability coverage, but if they don’t, recovery for your loss is reduced significantly.
Other prudent steps
- Purchase a personal renter’s insurance policy for the caregiver, written in their name, to provide coverage should someone or something in your home cause damage or loss to their personal property. The cost is nominal―usually about $200 a year.
- If the caregiver doesn’t have her own Worker’s Compensation Insurance or the placement agency can’t verify coverage, purchase your own policy. That way, you’ll be covered if the caregiver is injured while working at your home or driving your child to school in your vehicle.
- Consider adding Employment Practices Liability (EPL) coverage to your personal umbrella polity for protection in the event of a wrongful termination or sexual harassment lawsuit. The typical coverage limit, including legal defense fees, is $250,000.
- Conduct a thorough background check of your childcare applicant. Some insurance companies offer this service to their policyholders.
Let us help you
When you entrust the care of your children―along with your home and perhaps even your car―to anyone else, your parental responsibilities and potential risks grow in ways you probably never considered.
We can help you take the steps necessary to protect not only your children, but your home and other assets. The cost of adequate coverage can be nominal, perhaps insignificant, when compared to the alternative of not having any.
We invite you to discuss with us the details of your particular childcare situation. Oswald Companies is an award-winning consultative insurance brokerage and risk management firm and the insurance partner for The Ohio Society of CPAs. Oswald became the official administrator for the Society’s member insurance programs April 1, 2007. If you have specific questions regarding this change in our insurance programs, please call CPAnswers, the Society’s member service center, at 888.959.1212 or Oswald’s Ohio Society of CPAs insurance hotline at 888.767.4548.
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LAST UPDATED 1/14/2008