Workers' Compensation: Protecting Your Nanny and Your Home
The Liability Gap
Many homeowners assume their standard Homeowners Insurance policy covers domestic employees. It usually does not. Most policies have a specific exclusion for employees.
If your nanny is injured on the job (e.g., burns themselves while cooking, trips on the stairs, develops carpal tunnel from lifting a baby), you are personally liable for:
- Medical bills (which can reach six figures).
- Lost wages during recovery.
- Disability payments if the injury is permanent.
What is Workers' Comp?
Workers' Compensation is an insurance policy that pays for these costs. In exchange for the insurance paying out, the employee generally loses the right to sue you for negligence. It is a "grand bargain" that protects both parties.
Is it Mandatory?
- It depends on the state and the hours. California requires coverage for household employees broadly. New York requires it once a domestic employee works 40 or more hours per week. Massachusetts requires it once a domestic employee works 16 or more hours per week. Many other states key off hours or wages too.
- Check your state's current rules before hiring; thresholds change and the penalties for missing a mandatory policy are steep.
- Best Practice: Even if not legally required at your hours, get it. It is relatively inexpensive ($500-$1,000/year) compared to a $100,000 medical lawsuit.