It's the part of hiring a nanny families most often overlook: what happens if your nanny is injured while working — a fall on your stairs, a car accident on a school run? Workers' compensation insurance covers their medical bills and lost wages, and in many states carrying it isn't optional.

What workers' comp does

Workers' comp is a no-fault insurance that pays for a household employee's work-related injuries — medical treatment and a portion of lost wages while they recover. In exchange, it generally shields you from being sued directly over the injury. Without it, an on-the-job injury can become your personal liability.

Don't assume your homeowner's or renter's policy covers this. Standard policies often exclude employee injuries — you may need a specific workers' comp policy or a rider.

Which states require it

Requirements vary a lot by state, and often depend on how many hours your nanny works. A number of states — California, New York, Illinois, Massachusetts, New Jersey, Washington and others — require coverage for household employees, sometimes once a nanny works a set number of hours per week. Some states make it optional but strongly encourage it.

  • Some states require it for any household employee, or above an hours threshold (e.g., ~16+ hours/week).
  • Some states let you opt in voluntarily — often worth it for the protection.
  • A few have no requirement for household employers at all.
Check your own state's rule specifically — the labor or workers' compensation board's website is the authority. This is one area where 'my friend didn't need it' is bad guidance.

What it costs

For a household employee, workers' comp is usually modest — commonly in the range of $300 to $800 per year, depending on your state, your nanny's wages, and the insurer. Many families buy it through the same carrier as their home or auto policy.

How to get covered

  • Ask your home/auto insurer first — they often add household workers' comp easily.
  • Check your state fund — some states run their own workers' comp fund you can buy into.
  • Get it in place before day one so there's no gap in coverage.
This is general information, not legal or insurance advice. State rules and thresholds change — confirm your obligation with your state and a licensed insurance agent.

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The bottom line

Check whether your state requires workers' comp for a household employee — many do — and strongly consider it even where it's optional. For a few hundred dollars a year, it protects your nanny and shields you from a potentially huge bill.