Do I Need Workers' Comp Insurance for a Nanny in California?
The short answer is yes. If you hire a nanny, housekeeper, caregiver, estate manager, or any other household staff in California, state law says you must have workers' compensation insurance (Labor Code §3700). This rule applies even if you only have one employee, and it can even include family members.
Many families don't realize that hiring household help makes them an employer under state law. Payroll, tax withholding, and insurance are all required, but insurance is the part most people overlook.
What Workers' Compensation Actually Does for You
Workers' comp covers medical care and lost wages if a household employee is hurt or gets sick because of their job. For example, this could be a nanny who slips while carrying a child, a housekeeper who injures her back, or a caregiver who gets hurt lifting someone.
Just as important, it protects you. When an employee accepts workers' comp benefits, they usually give up the right to sue you as the employer, no matter who was at fault. Without coverage, you could be personally responsible for medical bills, wage replacement, and legal costs, all out of your own pocket.
The Homeowners Policy Trap
Here's where most families get caught.
California requires that every homeowners' policy with comprehensive personal liability coverage include workers' compensation coverage for household employees (Insurance Code §11590). So many families assume they're covered.
The catch is that this built-in coverage is meant for occasional help. Under California law, if someone worked less than 52 hours or earned less than $100 in the 90 days before an injury, they usually are not considered an employee. Your homeowners policy covers the occasional gardener, but a full-time nanny working over 40 hours a week is a different situation. In that case, you usually need to add coverage by endorsement or get a separate workers' compensation policy.
If you have full-time household staff and haven't checked how your policy works, it's best to find out before you ever need to file a claim.
Don't Forget the Car
If your nanny drives your children to school, activities, or errands, you should also review your auto insurance. It's common to add the nanny as a listed driver on your policy, but make sure your coverage limits are high enough and know what happens if she drives her own car for work. A serious accident involving your children and your employee is when you find out if your coverage is enough.
For many families, this is also where a personal umbrella policy can be very helpful.
What Happens If You Skip It
Not having the required coverage in California is a real risk:
- You are personally responsible for all medical expenses and lost wages if your employee is injured. For a serious injury, these costs can reach hundreds of thousands or even millions of dollars.
- The state can issue penalties and stop orders, and failing to carry required coverage is a criminal offense in California.
- Your employee can sue you directly, without the liability shield workers' comp provides.
For families with significant assets, an uninsured household employee injury is not a minor issue. It can have a direct impact on your finances.
How to Get Covered
Setting up coverage for household staff is straightforward:
- Begin by looking at your current policies. We review your homeowners and umbrella insurance to see what is already included and to find any gaps.
- You may need to add an endorsement or get a separate policy. Depending on your employee's hours, wages, and duties, coverage might be added to your homeowners policy or you may need a separate workers' compensation policy. Premiums are usually based on payroll.
- Make sure your insurance matches your payroll. If you use a household payroll service, your coverage and reporting should match how your staff are paid.
You will need some basic information, like each employee's job duties, schedule, and wages.
Beyond Workers' Comp: Other Coverage Worth Considering
- Employment practices liability (EPLI): Workers' comp does not cover claims by household employees for things like wrongful termination, harassment, or discrimination. For families with several staff members, this risk can be even greater than the risk of injury.
- Professional liability for the nanny: This covers claims of negligence or mistakes while doing their job. It is especially important if a nanny or caregiver gives medication or provides medical care.
Frequently Asked Questions
Does this apply to part-time housekeepers or babysitters?
Occasional, short-hour help is usually covered by the workers' comp included in your California homeowners policy. Regular part-time and full-time employees usually are not. The dividing line is 52 hours or $100 earned over 90 days.
My nanny is a family member. Do I still need coverage?
In many cases, yes. California's rules can include family members who do household work for pay. Don't assume being related means you are exempt.
Can I just pay my nanny as an independent contractor and avoid this?
No. In California, a nanny who works in your home on your schedule is almost always considered an employee, not a contractor. Misclassifying them can lead to tax problems and penalties, as well as insurance issues.
How much does a household workers' comp policy cost?
Premiums are based on payroll and duties. For most families, it's a modest cost relative to the exposure it eliminates — we're happy to provide a quote alongside a review of your existing coverage.
Every household is different. If you have a nanny, caregiver, or other domestic staff and are not sure how your current policies work, we can review them with you at no obligation. Contact us to discuss your situation.
Questions about this page? Email us at hello@falconwest.com