Does home insurance cover household staff?

"What makes sense? Having some coverage is what makes sense," says Rocha. "If there is a cost concern or a sense that the exposure is fairly vanilla, then perhaps the umbrella coverage is perfectly fine. But if the exposure is a bit more complex -- if there are different employment relationships such as loaned-leased employees or employees that straddle tasks -- then a commercial EPLI policy might be more flexible."

Leigh offers these additional tips to avoid common household staff trouble:

Hire smart: "A lot of families believe that you can do a background investigation on someone from a foreign country. And it's very dangerous to hire someone from another country because it's really hard to prove who that person is, and then to prove that they are that person and that they haven't committed a crime back home," she says.

Check insurance on all contractors and subcontractors: "If they don't have a certificate of insurance that lists their employer as having workman's compensation, if they get hurt, they can sue the homeowner," Leigh says.

Don't think that an undocumented worker can't sue you: They can and do, often with the help of a growing number of grassroots organizations that will provide a lawyer pro bono.

Routinely pull a credit report: Doing so will alert you if a member of your household staff has used your financial information to apply for a credit card in your name. Also, financially strapped employees may be more likely to steal from you.

Don't treat employees as independent contractors: The Internal Revenue Service will hold you accountable if you're not picking up the tax burden for your employees. If you control their schedule and the supplies they use, you're an employer in the eyes of the taxman.

"For most, the best insurance they could have is good common sense," says Leigh.



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