Insurance

As is the case in most states, California recognizes the principal of vicarious liability for employers, sometimes referred to as “respondeat superior.” This means that an employer is liable for an employee’s torts, including intentional torts, if the employee was acting within the scope of employment.

Because of the potential liability for employers, it is critical that you ensure you have the appropriate insurance coverage to protect you and your family.

Worker’s Compensation & Umbrella Liability

The State of California requires employers to carry a Worker’s Compensation policy for household employees. Some amount of Workers’s Compensation coverage is typically included in your homeowners or renters insurance policy, but it is important to discuss the scope of the coverage you have with your homeowners insurance agent. An additional rider on your existing policy may be needed based on the term or hours of employment for your household employee (i.e., full-time vs. part-time or permanent vs. temporary or incidental). Full coverage can be added to your homeowners or renters insurance policy, typically for several hundred dollars per year, and protects you should your household employee be injured at the job.

We also recommend that you check with your insurance agent about your umbrella liability policy. This policy will cover you for the actions of your employee and any damage caused by the employee. Your insurance agent can provide information regarding the terms and coverage.

Automobile Insurance

An automobile that is used for work purposes will require additional insurance, regardless of whether the automobile is owned by the employee or the employer. Each insurance company will have different rates & policies so we recommend that you call for more detailed information about the terms and coverage appropriate for your situation.

Here is some general information:

Household Employee Driving Employer’s Car

A Household Employee who regularly drives an employer’s car for her job may not be automatically covered by her employer’s existing insurance policy. If she is on the job doing errands or transporting your children and regularly drives your car, your insurance company may deny coverage if an accident occurs.

To be safe, you should add the Household Employee to your policy. To do this, you need to call your insurance company. They will ask for your Household Employee’s name, driver’s license number and date of birth. Typically, there is little or no increase to your premium to add him or her to your policy. However, in some cases a person may previously have made or been involved in insurance claims that did not include any report to or incident with the DMV (and therefore are not reflected at all on their DMV driving record). In that case, the insurance company may require additional premium payments to add your new employee to your auto insurance policy. Your insurance company is likely basing their decision on a private insurance industry data base report, commonly referred to as a “CLUE” report, that Town + Country and our background check investigators do not have access to.

Household Employee Driving Her Own Car for Work

Since your Household Employee is not a family member, she is not covered by your auto insurance while she is driving her own car for work use. Again, this can be a problem if your Household Employee is in an accident while driving during her working hours. Under “vicarious liability,” the law considers an employer to be liable for an injury caused by an employee while doing their work. Unless you ensure that it is included under your coverage, your insurance may not cover vicarious liability and you, as employer, can be held personally responsible for paying any damages that are more than the Household Employee’s coverage limits. Therefore if the Household Employee will use her own car while she is working to run errands or drive your children, you should check with your own auto or homeowners insurance agent to make sure you will be covered in case of an accident.

In addition, you should contact your auto insurance provider about getting an Employer Non-Owned Liability Policy (ENOL). The cost of this policy is modest, usually less than $50 per year. Typically, this coverage will not cover damage to the automobile(s), however it will offer personal liability coverage if you are sued by a third party as a result of the accident.

Another thing to consider is asking your Household Employee, particularly if you are contributing to the cost of his or her auto insurance, to list you as an “additional insured” on their policy. Then you will be notified if there are any lapses in her coverage.

Health Insurance for Employees

We recognize that many employers are interested in offering additional benefits for their household employees. Providing health insurance coverage is a great way to make certain that your employee has access to the health care resources. The following is an insurance broker that we recommend. They should be able to assist your employee with choosing a plan that offers the coverage your staff is seeking.

ProCo

Web Site: www.proinsurance.com