Who is responsible for a nanny’s insurance, the parents who employ a nanny or the nanny herself? This question is searched more frequently than any other on parenting forums. It’s usually followed right after the childcare contract is signed and a realisation hits that neither party explicitly clarified whose responsibility the nanny insurance UK is.
Realistically speaking, both parties need something, a kind of protective cover, that keeps the legal consequences of unfortunate incidents at bay. But that something does not have to be the same thing: employers carry one legal obligation while the nanny carries another, and confusing the two is how families end up genuinely uninsured without realising it.
Do Families Employing A Nanny Need Employers’ Liability Insurance?
Yes, and it’s not a choice you can leave out. Employers’ liability insurance is compulsory under the Employers’ Liability (Compulsory Insurance) Act 1969, which requires employers, such as a nanny working in your home, to have employers’ liability insurance from a recognised insurance company with a minimum of £5 million cover. This is true regardless of the working duration, for example, even when it’s just for 2 days a week.
If you fail to fulfil this obligation as the employer, the ramifications are not trivial:
- You are penalised up to £2500 per day for fines for as long as you continue to acquire the nanny service without a cover in place.
- If your nanny is injured at work, and you don’t have insurance, you could be held responsible for his or her injuries, which makes you personally liable.
- In addition, you will be fined £1,000 for not producing a valid certificate on request.
Employers’ liability is usually included in a household policy as an optional cover, so it’s well worth a quick phone call to make sure your nanny insurance is in place. Many families looking to compare policies running their household cover through a site like QuoteRadar end up discovering this as an add-on.
Is Your Nanny Self-Employed?
This is an important aspect that very few families address, because the 1969 Act covers employees and applies to your nanny only if she is your ‘employee’.
Coram PACEY, the UK’s leading membership body for childminders and nannies, has no qualms about where His Majesty’s Revenue and Customs (HMRC) stands on this: it states clearly that nannies “do not normally meet the criteria for self-employment” because they have to work set hours for a family, earn a regular wage, and are told what to do and when, which legally makes them employees of the family that has hired them. Their status is “the employee” stands true regardless of what they call it on paper.
There is an exception for ‘genuine self-employment’, usually for nannies who are filling in gaps between jobs or working for three or more families at the same time. However, even then it must be confirmed in writing by HMRC before it begins.
Why Does Your Nanny’s Employment Status Matter?
Some families do not pay for employers’ liability insurance because the nanny is, in their eyes, “self-employed” and thus not their responsibility to insure. But if HMRC later disputes this (as they often do), the family will not only be liable for backdated tax and National Insurance, but will also be penalised.
They may also find that they have been working without any cover at all: a self-employed contractor’s own public liability policy is not a replacement for the employer’s legal duty to provide cover. The employment status is not only a payroll issue, it’s also a question that determines whether you even have an insurance question.
What About Public Liability Insurance For Childminders?
This is where it gets tricky from the nannies’ perspective, and many fall short of understanding. The EYFS framework allows for registered childminders who operate from their own premises to be required to have public liability insurance, since their setting is inspected and registered with Ofsted or a childminder agency.
A self-employed nanny working in the family’s home does not have this kind of legal obligation; however, most professional nannies opt to have nanny insurance which covers public liability. Moreover, any nanny registered for the Ofsted voluntary register will need to have it as part of the registration process.
Given that so many of Coram PACEY’s members are in this ‘grey area’ between ‘not legally required’ and ‘expected by every reputable family’, it makes perfect sense that they organise practitioner insurance.
How Much Does Nanny Insurance Actually Cost?
Nanny insurance is cheaper than what families usually expect, which is why nannies are less likely to be insured than other service providers.
| Cover type | Who takes it out | Typical annual cost |
| Nanny public liability insurance | The nanny | £60–£90 |
| Nanny employers’ liability insurance | The family | £100–£110 |
| Childminder insurance (registered business) | The childminder | Higher — includes employers’ liability and often professional indemnity |
The annual premium on either side is a pretty low cost to eliminate that risk, considering the fines for not running with cover are in the thousands. The cost and features vary slightly from insurer to insurer, depending on the level of cover (for example, £1 million public liability vs £10 million), and whether it includes extras, such as legal expenses cover and overseas travel support.
You should consider the numbers suggested above only as a starting point, not a fixed quote.
Nanny Insurance Vs Childcare Insurance Vs Childminder Insurance
These three terms are used almost synonymously on the Internet but require different types of arrangements to work in:
| Term | What it actually covers |
| Nanny insurance | A nanny works inside a family’s personal space (usually home). It requires an employers’ liability (held by the family) and a personal public liability (held by the nanny) to practice. |
| Childminder insurance | This is a registered, Ofsted-inspected childcare business that the childminder runs from their own premises. It requires public liability, employers’ liability for assistants, sometimes professional indemnity (held by the childminder). |
| Childcare insurance | This is an umbrella term covering both of the above, plus nurseries, after-school clubs, and other settings |
It’s important to get the terminology right because it’s what you’re being quoted on when you start comparing quotes online.
Who Actually Pays: Parents Or the Nanny?
This is the bit that catches people out on forums time and again:
- Employers’ liability insurance → Since it is the family’s responsibility, the cost also falls on them. What’s important to note here is that it protects you as the employer.
- Public liability insurance → This responsibility, as a service provider, falls on the nanny; therefore, it is obtained and funded by them. This is to protect them from any claim if the child in care is injured or property damaged during working hours.
If the family decides to pay for the nanny’s personal liability, it can undermine the policy’s validity because it blurs the line between the one protecting and the one being protected. This confusion can cause claim rejection.
To Whom It May Concern…
If you are a nanny reading this, not an employer, ask your agency or Coram PACEY directly, rather than assuming it is being covered elsewhere.
If you’re a parent wondering just what you need to get your nanny’s cover right before she takes to the job, it’s better to compare some employers’ liability options than to accept whatever your home insurance policy includes as standard.
QuoteRadar’s comparison tools will help you see how nanny-specific cover options compare with a generic add-on.
FAQs
Does my home insurance already cover a nanny working in my house?
Sometimes, but you need to confirm it explicitly by contacting your insurer rather than assume it.
Does nanny insurance cover driving with the children?
No. You need separate motor cover arrangements as special add-ons.
Can a claim be made years after a nanny’s job ends?
Yes, some policies allow claims up until the child turns 21.
Do agency nannies need their own cover if the agency is insured?
Usually yes; agency policies typically protect the agency itself, not the nanny’s personal liability.
