Babysitting & Nanny Insurance: Cost, Coverage & Providers

Nanny insurance is a group of business policies designed for individuals who care for children. Whether they work out of their home or someone else’s, nannies’ policies like general liability and professional liability to protect their assets in case they are sued. Nanny insurance typically costs between $200 and $1,400 per year.

Unfortunately, nannies can have a hard time finding coverage, but CoverWallet can be a big help. CoverWallet is an online broker that utilizes technology to quickly compare multiple quotes from top carriers and find a low-cost option that’s right for you. Get started today by filling out a free, no-obligation questionnaire online.

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How Nanny Insurance Works

Nanny insurance protects your assets by covering risks that are common to the profession. For instance, a self-employed nanny needs general liability in case someone accuses them of causing property damage or bodily harm. Nannies might also need professional liability to cover the cost of negligence claims and commercial auto if they drive for work.

Families that employ nannies also need insurance to protect their assets. Most states require employers to get workers’ compensation insurance, and that often includes people who hire domestic workers. This policy reimburses employees for their lost wages and medical bills if they are injured on the job or suffer a work-related illness.

Who Nanny Insurance Is Right For

Nanny insurance is right for anyone who takes care of someone else’s children and for anyone who employs a nanny to take care of their kids. However, the person who is responsible for getting coverage depends on the work status of the nanny. Nannies who meet the IRS standards for self-employment need business insurance to protect their assets.

These are the IRS guidelines for determining who is an independent contractor:

• Behavioral: Independent contractors tend to have control over what they do and how they do it
• Financial: Independent contractors are less likely to be reimbursed for money spent out of pocket and more likely to be paid a flat fee
• Relational: Independent contractors usually sign contracts and are responsible for their own employment tax and health insurance

In most states, families that hire nannies are considered employers. That makes them responsible for payroll taxes and, in many states, workers’ compensation insurance.

Who Does Not Need Nanny Insurance

Nanny insurance is most appropriate for self-employed nannies and the families who hire nannies as employees. However, it’s not right for everyone. Some businesses, like nanny placement agencies and day cares, face greater and different risks. Other situations are too informal and make insurance unnecessary.

Nanny and child care insurance is not appropriate for the following individuals:

• Nanny staffing agency owners
• Day care centers owners
• Home day care providers
• Teenage babysitters

Day care center owners and home day care providers can find detailed information about their insurance needs in Day care Insurance: Cost, Coverage & More.

Child Care Insurance Providers

Five top providers of nanny and child care insurance are:

CoverWallet

CoverWallet is an online insurance broker that utilizes technology to allow you to quickly compare multiple quotes from top carriers and find a low-cost option that’s right for you. The platform is well-known for its ease of use and simplicity, making it so that small business owners understand how to choose the proper coverage.

Self-employed nannies should work with CoverWallet since, as independent contractors, they are responsible for their own coverage. CoverWallet makes the process easy by supplying multiple quotes for nannies to compare and see where their premium dollars go with each insurance carrier.

CoverHound

CoverHound simplifies the process of shopping for insurance online. They’re a reliable broker that shops and compares quotes from top carriers, including Progressive Commercial, Chubb, Liberty Mutual, Nationwide, and over 40 others. This ensures that you will get the right coverage for your business at an affordable price.

No matter the type of business you own, CoverHound will help make sure you’re protected. CoverHound strives to deliver fast and accurate rates from top insurers and simplify the process of getting nanny insurance you can rely on.

Philadelphia Insurance Companies

Philadelphia Insurance Companies is a specialty insurer that writes property and liability policies for select service industries. Most business owners connect with Philadelphia Insurance Companies through local agents and can find contact information on the company website.

Day care providers who offer field trips should work with Philadelphia Insurance Companies. The company’s child care insurance program includes off-premises travel coverage and commercial auto for buses, 15-passenger vans, and private passenger vehicles.

AP Intego

If you’re a self-employed nanny and you want more help choosing an insurance provider, you can visit AP Intego. Its nationally licensed agents will shop and compare insurance options from top-rated insurance companies. Get multiple quotes online in minutes and choose the policy that’s right for you.

Markel

Markel is a specialty insurer that offers nanny insurance for in-home child care providers. Their general liability policy has limits up to $3 million and includes coverage for sexual misconduct allegations. It also has a $200,000 per occurrence limit for accidents that pay out regardless of who’s at fault.

Nannies who care for children in their home can purchase this coverage through the American Federation of Daily-care Services, a purchasing group set up by Markel. Membership costs $60 and includes access to the company’s nanny insurance and loss control services.

Types of Self-employed Nanny Insurance

The nannies who are independent contractors need nanny insurance to cover the risks associated with that status. The most important coverages for nanny are liability policy, like general liability and professional liability. Many insurers combine these policies with abuse and molestation coverage for nannies. Some insurers also add commercial auto riders to general liability.

Most Common Types of Self-employed Nanny Insurance

General Liability Insurance for Nannies

General liability insurance covers your responsibility in accidents that cause property damage or bodily injury. It typically pays for medical expenses or repair bills, but it can also cover your legal defense. General liability also covers these costs when you’re accused of causing advertising injuries, like libel and slander.

A nanny may need general liability insurance if:

• They knock over an expensive vase while playing with the children
• A child breaks their clavicle in a freak accident
• Another nanny claims they started rumors that resulted in the nanny’s termination

In events like these, general liability insurance protects your assets by covering the costs you would otherwise pay out of pocket.

Abuse & Molestation Coverage for Nannies

Working with children can put you at risk for accusations of sexual misconduct. Abuse and molestation insurance covers these accusations by paying your lawyer bills, investigation fees, and court costs. Policies can be purchased as standalones, but nannies usually get general liability policies with individual limits for abuse and molestation.

Businesses that provide nanny services often get abuse and molestation insurance to protect their liability when one of their employees is accused of sexual misconduct. However, the coverage seldom extends to the perpetrator in an intentional act. Nannies who work as independent contractors may still want abuse and molestation insurance as it typically covers claims when you’re proven innocent.

Commercial Auto Insurance for Nannies

Nannies who drive their personal autos to pick up children from school or run errands probably need Commercial Auto Insurance. It covers your liability in accidents by paying for the injuries and property damage you cause.

A nanny might get additional auto insurance coverage, like:

• Medical payments: For injuries you and your passengers sustain
• Collision: For damage to your car
• Uninsured & underinsured motorist: For when the other driver is responsible for damages but cannot pay

Personal auto policies typically exclude business-related driving, leaving nannies uncovered if they use their own car for work. However, a standalone policy may be too much insurance for nannies. Ask your agent about adding coverage to your general liability insurance.

Disability Insurance for Nannies

Depending on state laws, families who employ domestic workers like nannies need to get workers’ compensation to cover their job-related illnesses and injuries. However, nannies who are classified as independent contractors or who work where state law does not require workers’ comp may need Disability Insurance.

Disability insurance pays a portion of your salary when you can’t work due to a physical injury, illness, medical condition, or pregnancy. You can opt for short-term disability, which typically pays around 50% to 60% of your salary for 13 to 26 weeks, or long-term disability, which covers about 60% of your salary for 26 weeks or more.

Professional Liability Insurance for Nannies

A family may sue if they think you were negligent in your duties. For instance, a parent may accuse of serving an allergen to a child or offering advice that causes an injury. If they do, professional liability insurance, also known as errors and omissions (E&O ) insurance, covers your legal bills, paying for attorneys, court costs, and settlements or judgments that don’t go your way.

Traditionally, professional liability insurance is reserved for professionals, such as individuals who have completed required studies and who have a set of standards to uphold. But insurers have responded to an increase in negligence lawsuits by offering E&O insurance to nontraditional professionals. Combine a litigious society with parents’ desire to protect their children and professional liability insurance may be right for you.

Surety Bonds for Nannies

Some families only hire nannies who have a surety bond in addition to liability coverage. A surety bond isn’t so much a type of insurance as it is a guarantee for the family. The bond provider promises to pay claims the family makes against you. Their willingness to offer you a bond is seen as a sign that you’re trustworthy.

Essentially, a surety bond provider agrees to pay if you:

• Steal from the family.
• Fail to provide contracted services.
• Cause damages.

Few nannies carry bonds. While they can be relatively inexpensive, perhaps $200 per year, they are tied to specific incidents. Liability coverage typically provides broader coverage.

Types of Nanny Insurance for Families

Most nannies are hired as employees, meaning they don’t control the work they perform. The person who hires the nanny typically gives them directions, and that makes the individual an employer. It also changes the employer’s insurance needs.

People who employ nannies may need:

• Workers’ compensation insurance: There are 25 states require you to carry workers’ comp to pay for a nanny’s job-related injuries and illnesses; even if your state doesn’t make coverage mandatory, you may opt-in to protect your assets
• Employer’s liability insurance: This policy is usually included in workers’ comp to cover your legal bills if the nanny claims your negligence caused their injury
• Auto insurance: Granted, you probably already have auto insurance; however, you want to be sure to add your nanny as an occasional operator and to add uninsured or underinsured coverage if you don’t already have it
• Personal umbrella liability insurance: Umbrella insurance can extend the limits of the liability coverage in your home insurance, which can come into play if a family you nanny-share with sues for an injury to their child

An umbrella policy can also extend the limits on your auto insurance and employer’s liability insurance. The latter is uncommon, so be sure to ask your agent if employer’s liability is included.

Self-employed Nanny & Babysitting Insurance Costs

The main type of nanny or babysitting insurance is general liability, which they can typically get for less than $70 per month. However, adding additional but necessary coverages, like abuse and molestation or professional liability insurance, can increase the rate. Nannies who drive their own car may spend the most on commercial auto insurance.

Nanny Insurance Costs & Deductibles by Insurance Type

*Most insurers don’t require a deductible for these liability policies, but you can request one to keep your costs down.

Self-employed nannies and babysitters who work in a family’s home may not need as much coverage as those who watch children in their own home. When children are out of their parents’ sight, misunderstanding can happen that lead to lawsuits. Unfortunately, filing claims can increase your premiums.

The same may be said for the parents who hire nannies. As an employer and a parent, you want to make sure everyone stays safe and happy.

In either case, you can reduce your risks, and your babysitting insurance costs, by:

• Using written contracts: Getting everything in writing may sound formal, but it’s a good way to make sure all parties know what they are responsible for
• Learning first aid and child care basics: Preventing injuries and providing immediate care when they occur can stop problems from getting worse and reduce the change of a lawsuit; parents should make sure their nanny has appropriate training

Nanny Insurance vs Day Care Insurance

Both nannies and day care providers take care of children. However, nannies are professionals who most often work in the family’s home. Day care providers may work in their own homes or a daycare center and usually take in children from multiple families. These differences can impact their insurance needs.

The owner of a day care center most likely recognizes they are a business owner, but home day care provider may see their services as casual babysitting. In fact, they own a home-based business and may even need a license depending on the number of children they care for. It also means they need more business insurance than a nanny. More detailed information is available our ultimate guide to day care insurance.

Tips on Getting Nanny Insurance

Nannies and the families that hire them don’t always recognize that they’re running a business. That’s not a problem until things go awry, and then it’s too late.

Here are a few tips for getting nanny insurance.

Start with a Work Agreement

The nanny and family relationship is unique, but it’s still a business relationship. You want to make sure it runs smoothly. A written work agreement that states expectations and responsibilities can help, plus it might help you identify if the nanny is an independent contractor or an employee.

Nannies Should Insure Their Personal Belongings

As the president of the Amslee Institute, a licensed online technical school with a child care curriculum specifically designed for professional nannies, Elizabeth Molson says nannies need to think about their personal insurance needs.

“Smartphones and other electronics can be damaged by children. If you are a live-in nanny, you may need a renter’s insurance policy to cover your private property. As an employee, your possessions may not be covered by the employer’s homeowner’s policy in the event of a break-in and theft or fire.”

Do Not Rely on Your Homeowner’s Insurance

According to Nick Colson of Compass Insurance Agency, your personal insurance does not cover an injury your nanny suffers when working in your home.

“A lot of families are under the impression that their homeowner’s insurance covers nannies. They are wrong. Nannies are W-2 employees or at least should be. Their income must be reported on an IRS W-2 form; therefore, the family is looked at as a business and entity that has liabilities, rather than just a family with a home.”

Nanny Insurance Frequently Asked Questions (FAQs)

We’ve answered a few of the most frequently asked questions here. If you don’t see yours, please add it to the comment section below or post it to our forum.

Are Nannies Required to Have Insurance?

There’s no government agency regulating nannies. No one issues a nanny license or requires they carry insurance. The only situations where nanny insurance is required is when the family hires them as an employee. In that case, most states require the family gets workers’ compensation insurance.

Do I Need Insurance For Child Care Services I Provide In My Home?

Home day care providers need nanny insurance because homeowner’s policies usually exclude business activities. Once you take money for your services, you’re operating a business, even if it’s in your home. Check out our article on Home-based Business Insurance for a list of common policies at-home providers need.

Does my Car Insurance Cover My Nanny?

Most insurance companies want you to list all drivers on your policy, so you should add your nanny to your personal auto insurance. You can even list the nanny as a nonresident driver if she or he doesn’t live with you. But if you nanny uses your car infrequently, they are most likely covered as a permissive user.

The Bottom Line

Professional babysitters and nannies operate in a gray area. They need to clarify their work status with their families to determine what sort of insurance covers their liabilities. Once they know if they are independent contractors or employees, they can choose the coverage that makes sense for their risks.

CoverWallet can be a big help in getting coverage that makes sense for your risks. Once a nanny fills out the free, no-obligation questionnaire online, CoverWallet’s technology quickly generates multiple quotes from top carriers and finds a low-cost option that’s right for you. Get started today.

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