Insurance Issues when Employing Household Help

At our insurance agency clients frequently ask for guidance on insurance issues when they hire household help. Questions arise about workers compensation and automobile insurance. 

Workers Compensation Insurance
Employers are required by law to provide workers compensation insurance, in most states, for employees who will work full time  Although many states do not require workers compensation insurance for a part-time employee, the employer can still be held liable for injuries sustained.  Workers Compensation provides no-fault compensation for injuries sustained at work and lost pay.  The cost is usually around $1,000 per year for a full time employee.

Workers compensation insurance reduces the possibility of being sued by an employee, as the right to sue is generally waived in order to claim the scheduled benefits.  Health insurance is not a substitute for workers compensation insurance.  Many people don’t realize that a health insurer  might decide a claim it paid was really work related, and pursue the employer for reimbursement.  A homeowners policy is not a substitute for workers compensation insurance. There may be some coverage for injuries, but there may not be coverage for lost wages. In addition, workers compensation insurance is paid almost immediately, while the homeowners policy will typically provide reimbursement at a later date, after a claim has been are submitted and evaluated.


Auto Insurance
If your employee drives their own car, you should ensure that the employee has sufficient liability limits because if there is an accident you will likely be brought in to any lawsuit as the employer. You might pay the difference to increase the limits on the policy, or you might want to insure the vehicle yourself on a separate insurance policy.

Because it is likely that your own auto liability limits are higher, the preferable solution may be to have the employee driver your car which is probably safer than their car anyway.  You should add your employee to your policy as an additional driver so accidents that occur when driving your car will be covered by your auto policy.


A representative of Chartwell Insurance Services will be pleased to discuss all aspects of your personal insurance.
Contact:  Rebecca Korach Woan
312-645-1200 or

Copyright 2013  Rebecca Korach Woan, all rights reserved.

Chartwell Insurance Services, Inc. is an independent insurance broker specializing in the personal asset protection of high net worth individuals.  


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First Class Care by Mom's Best Friend is Chicagoland's Premier Domestic Placement Agency. We specialize in placing Nannies, Housekeepers, Newborn Care Specialists, Babysitters, House Managers, Chefs and Personal Assistants.
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