Automobile insurance provides coverage for family members who cause injury or property damage while driving an automobile. Unfortunately, there are many exclusions and exceptions. A nanny is PROBABLY covered while she is driving the family’s automobile, but to be safe, the family should add the nanny to the policy as an additional insured.
Since a nanny is not a family member, she is not covered by the family’s automobile insurance while she is driving her own car. This can be a significant problem if the nanny is in an accident while driving on family business. The law considers an employer to liable for an injury caused by an employee while doing their work. This is what is referred to as “vicarious liability”. The family’s automobile insurance will not cover vicarious liability and the family can be held personally responsible for paying any damages that are more than the nanny’s coverage limits. Therefore, either the family should not let the nanny use her own car while she is working or, if she will be using her own car, the family should make sure that the nanny has, or buy her, coverage limits at least equal to the coverage limits on the family’s automobile.
Another concern is whether the nanny is driving her own automobile as part of her job. If so, the nanny’s insurance may not provide coverage. Automobiles that are used in a job are assumed to be on the road more and therefore they are more likely to be in accidents, so an automobile insurance policy that provides coverage for business use has a higher premium. A nanny who regularly drives family members as part of her duties may find that this is considered business use and that she has no coverage for an accident that occurs while she is working, especially if providing transportation is part of her contract or she is paid extra for the use of her car or reimbursed for gas/mileage. To be safe, the nanny should check with her insurance agent about including business use in her automobile insurance policy as the premium difference (if there even is one) usually is not very much.
In summary, when it comes to nanny insurance, it is very important to know what is covered, who is covered and how much coverage you have. This can only be done by carefully reading the policy and the “coverage selection” page or “declaration sheet”. Furthermore, is it advised that you double check with your insurance agent to ensure you are covered in any given circumstance!
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