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Do You Need to Insure Your Sitter?

What happens if your afternoon baby-sitter sprains her ankle while playing with your 5-year-old? Or if she uproots a mailbox  -- in your car  -- on her way to pick him up from a playdate?

"Most people don't think about caregiver insurance until something bad happens," says Jeanne Salvatore, director of consumer affairs at the Insurance Information Institute. Better to figure out your needs as soon as you decide to hire someone.

The first step: Read your policies and call your insurance agent with any questions. Issues to consider when determining your needs:

IS THE SITTER MY EMPLOYEE?

Maybe not: The legal definition of an employee varies by state and determines what insurance you're required to provide. In many states domestic workers aren't considered employees unless they work a certain number of hours per week or earn more than a certain amount. For the definition in your state, contact your insurance agent.

DO I NEED TO PROVIDE WORKERS' COMPENSATION?

If your answer to the first question was yes, then you probably do. Workers' comp is insurance that pays for the medical care and physical rehabilitation of workers injured on the job and replaces their lost wages for the time they couldn't work  -- regardless of how or why the injury occurred. You can buy a workers' comp policy separately or add it on to your homeowner's policy for about $200 to $400 per year.

WHAT IF I DON'T HAVE TO PROVIDE WORKERS' COMPENSATION?

You can either rely on the liability provision in your homeowner's or renter's policy (the same thing that protects you if someone slips on your walkway) or get workers' comp anyway. Unlike workers' comp, the homeowner's liability provision requires that your caregiver prove you were responsible for an injury to be covered  -- and she would have to sue you to collect.

"If you're not required to buy workers' compensation, I don't think there's a real need to if you're already covered by your homeowner's or renter's policy," says Deborah Forman, Ph.D., professor of law at Whittier Law School and author of Every Parent's Guide to the Law. "However, if you're sued, you're potentially liable for more money than in a workers' compensation claim. You may feel that it's better to be safe than sorry."

DO I NEED TO CHANGE MY CAR INSURANCE?

"If your sitter will be driving your car on a regular basis, add her to your policy," says Salvatore. If she uproots that mailbox and isn't listed, the insurance investigator will undoubtedly try to determine how often she uses your car; if he finds out that she drives that route every Monday and Wednesday, it could hinder the claim. It usually doesn't cost anything to add a name to your auto insurance, unless the person has a history of accidents.

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