Here are some essential tips to determining if you and your babysitter are protected in the event of an accident:

  1. Make sure your homeowners policy has adequate liability coverage.
    Talk to your insurance agent about how much liability coverage your current policy includes. You may find it’s quite affordable to increase home liability coverage.
  2. Know the amount of “no-fault medical coverage” in your homeowner’s policy.
    With this type of coverage, if your babysitter — or anyone beyond an immediate family member — were to sustain an injury on your property, you would be able to submit his or her medical bills directly to your insurance company and be reimbursed. This can help you avoid a long and expensive legal tussle if an accident were to occur.
  3. Consider purchasing an umbrella policy.
    Also called “excess liability insurance,” an umbrella policy goes beyond the monetary limits of a homeowners policy and provides added protection if an injured party were to sue you. For an estimated $150 to $300 per year, you could purchase a $1 million personal umbrella liability policy that would kick in after you’d exhausted your homeowners policy limits.
  4. Don’t treat a full-time nanny the same as an occasional babysitter.
    If you hire someone to watch your children in your home all day several days a week while you and your spouse are at work, you don’t have a babysitter — you have a full-time employee working in your home. In this case, you could reduce your risk by claiming this caretaker as an employee and providing workers’ compensation insurance. This is important because, if an injury or lawsuit were to occur, your homeowners insurance could deny any claims the insurer determines should fall under workers’ compensation. This means you could be on the hook for the caretaker’s medical bills, attorney’s fees, and lost wages if he or she is unable to work.