The frequency and exposure of lawsuits by various domestic help is a serious and growing threat. In the last few years I have seen more claims by domestic staff including maids, nannies, housekeepers, cooks, gardeners, personal trainers and etc. than ever before.
Claims include wage and labor issues, sexual harassment, personal injury, wrongful termination, and discrimination. In other words, all the same issues you’d be worried about in a business setting but which are seemingly ignored at home.
If you are financially successful and/or famous, the stakes are even higher as the reputational damage and media attention that comes from these claims can be damaging in many ways beyond just a lawsuit judgment itself. See the headlines for big cases with nasty allegations against celebrities and CEOs as two glaring examples. We’ve seen it affect contracts, endorsement deals and even stock prices.
All my clients that have domestic help are advised to have the following:
A written employment agreement that includes mandatory mediation and arbitration provisions as well as a confidentiality agreement;
EPLI (employment practices liability) insurance – this covers you against lawsuits by your staff;
Worker’s comp coverage;
A high limit personal liability policy on the home with an umbrella of at least $2MM, and based on your net worth, maybe higher.
If you haven’t been advised to do this, get better legal help and implement these measures going forward. Juries don’t feel sorry for people with household help, in fact, many of them will be household help.
As always, back all this up with proactive wealth preservation and asset protection strategies implemented by an experienced professional.
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