What is Massachusetts Nanny (Au Pair) Insurance and Who Needs it?

If you’re a nanny or au pair, I’m sure you’ve realized you are your own human resources department. There’s no orientation, no specific policies and procedures to follow, and nobody looking out for you, making sure you sign up for the proper insurance policies and coverages — that’s all up to you.

If you employ a nanny or au pair, similar risks apply. Since you technically have someone working for you, you are liable if anything happens to them on the job.

While you might see your nannying job/hired nanny as a casual employment situation, there are many risks associated with the arrangement, and if you don’t have proper insurance, you might not be covered.

Many childcare professionals or employers may think they have the necessary coverage through their homeowner’s insurance or their employer’s homeowner’s insurance, but that is not the case.

At Berry Insurance, we’ve worked with hundreds of Massachusetts childcare professionals and their employers, educating them about their insurance options and guiding them through the process of acquiring an insurance policy that meets all their needs.

We’re hoping we can do the same for you, beginning with discussing each of these types of coverages, and which you might need to protect yourself, whether you’re hiring a nanny or au pair, or if you are one yourself.

What is Massachusetts nanny insurance?

As a childcare professional, you need “nanny insurance” to protect you from the risks associated with childcare, but the exact types of insurance coverages needed vary from caregiver to caregiver.

“Nanny insurance” itself does not actually exist. It is not one simple insurance policy, but instead, a group of policies covering various childcare instances. 

Some of these coverages might include general liability insurance, personal liability insurance, abuse and molestation insurance, commercial auto insurance, worker’s compensation and disability insurance. 

What types of insurance do nannies need?

Depending on where you provide your services, what specific childcare services you are providing, and other factors, you may need one, two, or several of these insurance policies.

General liability insurance:

General liability insurance covers a nanny or au pair if they cause property damage or bodily injury to others.

For example, if a nanny accidentally takes a spill and shatters a precious family heirloom in their client’s home, it would be covered under general liability insurance.

Now, if a nanny tried to take away something dangerous from the child (like a knife from a counter) and accidentally dislocated the child’s elbow … that would also be covered under general liability insurance.

In these and any other situations of property damage or bodily harm, this type of nanny insurance pays for medical bills, repair bills, and the cost of legal defense.

Most nannies and au pairs should have general liability insurance, because it covers a number of common household accidents that, without the coverage, could be costly.

Abuse and molestation coverage:

Sometimes included within general liability insurance, abuse and molestation insurance protects nannies against accusations of sexual misconduct. If a nanny is accused of sexual misconduct of a child they care for, this insurance covers lawyer bills, investigation costs, and court fees.

General liability insurance cost:

An individual can expect to pay around $500 to $1,000 per year for general liability insurance.

Professional liability insurance:

Professional liability insurance (also known as errors and omissions insurance) protects nannies from costs associated with accusations of negligence.

Examples of negligence include failing to supervise a child, not feeding or providing medicine, serving an allergen, or giving advice that causes injury.

If a family accuses a nanny of negligence, the insurance would cover the legal defense costs such as bills for attorneys and court costs.

Although nannies may not think they need professional liability insurance because they are responsible and would not neglect the children they care for, it provides important coverage against the costs of accusations, whether or not they are true.

Professional liability insurance cost:

This insurance can range from around $500-$2,500 per year, depending on policy limits.

Commercial auto insurance:

Commercial auto insurance covers a nanny’s liability in accidents that occur on the job, paying for property damage or injuries.

If a nanny or au pair drives their personal vehicle to drive children they care for, they should change the auto rating to “business use” on their personal auto policy. If a nanny is driving children in their care with the family’s vehicle, the nanny should consider purchasing a commercial auto policy that covers “hired and non-owned auto liability.”

Commercial auto cost:

Depending on each individual carrier’s internal rating system, changing your rating for business use could either cause a small increase or decrease (approximately $25-$75 each year).

Disability insurance:

If a nanny is unable to work due to an injury or medical condition, disability insurance would pay a portion of their wages.

Disability can either be short-term, paying 50-60% of the policy holder’s salary for 13-26 weeks, or long-term, paying around 60% of the policy holder’s salary for 26 weeks or more.

Disability insurance cost:

Disability insurance typically costs 1-3% of your salary, depending on factors such as coverage amount, benefit period, waiting period, age, location, and more.

What types of insurance do people hiring nannies need? 

If you employ a nanny or au pair, you also need specific insurance protections. 

Workers' compensation insurance:

Workers compensation covers compensation for medical bills and lost wages for any employees who get hurt or suffer a work-related illness on the job.

In Massachusetts, if you employ a nanny or au pair working more than 16 hours per week, you are required to get workers compensation insurance for them, even if you only pay them with cash.

If you employ a nanny who doesn’t work 16 hours per week, you are not required to insure them, but you still should because if they get hurt on the job, they can come after you directly to pay for their expenses.

Workers' compensation insurance cost:

For each nanny that works for you, the base charge is $141 per year. (With fees and state assessment charges, the total cost for one nanny on a $1 million workers compensation policy is $286.)

Employer’s liability insurance:

Typically included in workers compensation insurance, employer’s liability insurance covers associated costs if a nanny claims their employer’s negligence caused their injury.

Auto insurance:

If your nanny will be driving your car, you (their employer) should add them as a driver to their insurance policy to ensure coverage if there were to be an accident while the nanny was driving.

Adding a driver to your auto insurance cost:

Your policy could increase if you are adding an inexperienced driver or someone with a bad driving record. It could also decrease if you are adding a driver with a good driving record or getting a multi-car discount.

Personal umbrella liability insurance:

If you have a nanny or au pair who works in your home, you should consider acquiring personal umbrella liability insurance, which extends liability coverage on your home and auto insurance.

Since you will not be home caring for your children directly, you have no control over what is happening at home with the nanny. With the added risks, you may want the extra coverage.

Professional umbrella liability insurance cost:

The cost of an umbrella policy varies greatly depending on several factors, but to give you an idea a $1 million umbrella policy can cost approximately $150 to $300 per year.

Who needs nanny insurance?

Any person who cares for someone else’s children or who allows someone else to take care of their children should consider nanny insurance for protection against any number of work related risks.

If you employ a nanny or au pair who works more than 16 hours per week, it’s not a choice … the state of Massachusetts requires you to at least carry workers compensation insurance. But the coverages we’ve outlined above are also worth considering.

Who does not need nanny insurance?

Childcare workers who work for daycares or nanny placement agencies often do not need nanny insurance because the businesses already have these protections on a broader scale under their commercial insurance policies.

If a childcare situation is more casual, nanny insurance is not necessarily needed. For example, occasional babysitting outside of the home would not be considered an “employment” arrangement (especially for minors), and thus that individual may not need the coverages listed above.

That being said, anyone caring for someone else’s child(ren) is at risk of being sued. For these occasional instances, the babysitter’s coverage would come from their (or their parent’s) personal liability – either from a homeowners, renters, or condo insurance policy.

Childcare is important -- be protected:

Regardless of your childcare situation, you’re going to want to be protected.

Nannying and employing a nanny is a two-way street. Both parties should be equipped with insurance to protect you from a number of potential incidents.

We know deciding which nanny coverages you need can be overwhelming, but that’s what we’re here for!

At Berry Insurance, we have helped many childcare professionals and the families they work for secure the coverage right for them. Read more about nanny insurance to learn more about the coverages and see if it makes sense for you.