What to Know About Insuring a Household Employee

The coverage that protects your family and your staff, and the gaps you may not know you have.

Insurance is the least glamorous part of employing someone in your home and one of the most important, because the gaps are invisible right up until the moment they matter. A little attention here protects both your household and the people who work in it.

Workers' compensation is the first and most significant. It covers medical costs and a portion of lost wages if an employee is hurt or becomes ill on the job, and many states require household employers to carry it, some for any domestic employee, others for full-time staff. The penalties for lacking required coverage can be steep. Even where it is not mandated, it is often wise, because the everyday risks of someone working in and around a home are real, and without coverage you may be personally liable.

The gap that surprises families most concerns homeowner's insurance. Many assume their existing policy will cover an injury to a household employee, and frequently it will not, or will cover far less than the exposure warrants. It is worth speaking with your insurer specifically about household employees: what your current policy does and does not cover, and whether you need to add coverage or carry workers' compensation separately. Discovering the gap after an injury is the worst possible time.

There are other coverages worth a thought depending on your situation. If staff drive your vehicles or their own for work, auto insurance and how it applies to work driving deserves a look. For families with significant assets or staff, broader liability or umbrella coverage may be sensible. And some families choose to help provide, or contribute toward, health insurance for their employees, both as a benefit that attracts good people and as part of treating a role professionally; standard packages often include health insurance or an allowance toward it.

The practical path is straightforward: confirm your state's workers' compensation requirement and secure coverage where it is required or prudent, ask your homeowner's insurer directly about household-employee coverage and close any gap, and consider auto and liability exposure given how your household actually operates. Much of this can be coordinated alongside payroll, and some payroll services for household employers offer workers' compensation directly, which keeps it simple.

A note of caution: insurance requirements and what policies cover vary by state and insurer and change over time. This is general information, not legal or insurance advice; confirm your specific situation with qualified professionals. At Nannies + more…®, it is the standard behind every search we conduct.