Workers’ compensation is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee’s right to sue his or her employer for the tort of negligence. The tradeoff between assured, limited coverage and lack of recourse outside the worker compensation system is known as “the compensation bargain”. Do you have Domestic Employees? If you have a Nanny or other domestic individuals that work 26 or more hours per week you are required by law to provide workers compensation on that individual. This will take care of necessary medical bills and a portion of their wages should they become injured as a result of their specific duties. If someone becomes injured and you do not have workers compensation and a claim is submitted to your insurance carrier, the company can deny such a claim due to the employer/employee relationship. The annual cost of a Workers’ Compensation policy for domestic employees varies according to the number of employees you have. The average cost of a policy covering one domestic employee can run between $1000 and $1300 per year. Employment Practices Liability Clients with domestic employees, including drivers, childcare providers, housekeepers and caretakers, can purchase coverage to protect against allegations of wrongful employment acts, such as wrongful termination, sexual harassment and discrimination.