Many people have turned to hiring a nanny or part time maid as both parents have obligations on their time and their days get over scheduled. Often, people wonder if they need new insurance coverage. I know this is a small departure from my usual writings on commercial insurance, but I think you may find it helpful.
There are a few things to consider for insurance after you have decided to hire a domestic employee. The easiest is workers compensation. This paragraph is specific to Illinois, and each state has separate requirements that basically fall into three categories. The first category is that usually domestic employees are not required to be covered under workers compensation. The second is that full time employees are required to be covered and the third is that even part time employees are required to be covered. In Illinois, Any worker or workers employed for a total of 40 or more hours per week for a period of 13 or more weeks during a calendar year by any household or residence must be provided workers compensation insurance. However, if the position is part time (35 hours) it is not required. Workers compensation for a domestic employee ends up costing about $600, so it's nice to avoid when possible.
As far as liability insurance, your homeowners insurance will extend coverage automatically. At renewal, you should make them aware you have a regular domestic employee. This would be true of a nanny or any other domestic employee. Your homeowner's insurance covers any bodily injury they may cause to a non-household member and any property damage they may cause in the course of their work outside the home.
Homeowners insurance would also apply as normal (with the deductible) to any theft of your property committed by your employee.
The household's auto insurance also extends to your employee driving your vehicle. So you can have your employee drive your auto without additional coverage. No notification of the carrier is required. Despite what a personal lines agent may tell you, the employee would not be considered a household member and should not be rated on your policy.
Following the above conditions, you should not require any additional coverage.
