Domestic staff can be an invaluable asset in helping your life run smoothly. Whether it's a nanny, housekeeper, pool cleaner or personal assistant, everyone can use a helping hand now and again. However, employing domestic staff can also leave you vulnerable to lawsuits.

Risks posed by domestic staff

In addition to liability issues that may arise due to accidents that occur on your property, there are a number of exposures associated with having domestic staff. Wrongful termination, privacy issues, discrimination and harassment claims can all lead to expensive legal battles. All it takes is one disgruntled employee to file suit and a pleasant, productive working relationship becomes a frustrating and costly ordeal.

Most policies don't cover employment practices

Many homeowners are under the mistaken impression that a homeowner's or umbrella insurance policy will protect them under such circumstances. Unfortunately, most policies do not apply coverage to lawsuits based on wrongful employment practices.

Obtaining employment practices liability insurance, or EPLI, will protect you from these types of claims. While it's possible to add an EPLI endorsement to an existing insurance policy, the coverage is typically much less than a separate EPLI policy. In addition, EPLI endorsements typically only provide coverage for named issues, while standalone EPLI policies feature broader coverage.

What does EPLI protect against?

  • Wrongful Termination:  Ending a working relationship can leave employees feeling angry and slighted. EPLI policies cover claims of being wrongfully discharged. In some cases, these policies will also cover claims from employees who say they were forced to quit due to an intolerable working environment.
  • Harassment: EPLI covers charges of harassment, sexual or otherwise, brought against either employers or fellow employees. 
  • Discrimination: Whether a claim is based on race, color, creed, national origin, gender, age, religion, sex, marital status, sexual orientation, military service, pregnancy, disability or a handicap, EPLI policies protect against charges of employment-based discrimination.
  • Additional claims:  EPLI also protects against wage and hour, defamation, invasion of privacy, mental anguish, emotional distress, assault, battery, breach of contract and negligence claims.

While obtaining employment practices liability insurance is an essential part of guarding against lawsuits associated with domestic staff, preventing a problem is just as important as finding a solution to one. By strategically planning and remaining diligent, employers can ensure that the risk of lawsuits arising from domestic staff is minimized.

Hiring

Hiring a worker for your household requires the same care and attention you would give to hiring an employee at a company. In fact, since domestic staff will have more intimate access to your home and family, extra attention is crucial. Conducting an interview, checking in with references and performing a thorough background check are all important parts of the hiring process.

If an employee is provided for you by a company, you can always request a change in staff. For instance, if a landscaping company sends employees to your home that don't fit your hiring requirements, ask for a different crew. If the business doesn't wish to comply, simply hire a different company.

Keep in mind that it's doubly important to research potential employees from foreign countries. Hiring an illegal immigrant can leave you open to many legal problems.

Insurance

Domestic staff employment liability insurance does not protect against bodily injury or destruction of property. It's vital to make sure you're covered against accidents that may occur on your property.

In addition to your own insurance, you should make sure your domestic staff is insured. Suppose a pool cleaning company doesn't provide insurance for one of their employees. If this individual is injured while working on your property, you may be held responsible or become the defendant in a lawsuit.

Termination

Hiring an employee often means eventually letting them go, as well. While discharging an employee can be an uncomfortable experience, it may be necessary. The termination process deserves the same diligence as the hiring process. If possible, conduct an exit interview in order to explain your decision and take care of any lingering issues that may lead to legal action down the road. The entire process should be properly documented and in line with state and federal regulations. If confidentiality is an issue, employers must get a signed copy of a confidentiality agreement. Also, employers must keep copies of Form I-9s for either three years after hiring an employee or one year after terminating an employee.

Please consult with your HUB International broker to review your options and protect yourself if you employ or are planning on hiring domestic staff.