What can happen if my child gets hurt while someone else is watching him at their house in exchange for payment and an insurance company refuses to pay?

On June 2, 2011, our Appellate Division, in an unpublished opinion titled Bay State Insurance Company v. Jennings, ordered a plenary hearing to be held by a trial judge in order to determine whether the homeowner, Carol Collins, was running a for-profit business at her house when Kirsten Jennings, a child she was watching, was injured. In that case, Kirsten injured her leg when the shopping cart she was sitting in tipped over. Collins, who was pushing the cart in a Sam’s Club parking lot in Freehold, New Jersey, lost her balance and fell. As Collins fell, she pulled the cart down with her.

On the date of that accident, Collins was caring for two minor children. The parties did not dispute that Collins would normally watch Kirsten two days a week, when Kirsten was not in daycare and her mother, Tina Jennings, was at work. Kirsten’s mother gave Collins $35 per day to watch Kirsten. The parties disputed the extent to which this amount of money constituted consideration and to what extent it was offered to cover the everyday expenses associated with Kirsten’s care.

According to both Jennings and Collins, the $35 was to be used for items such as “food, diapers, and wipes,” for Kirsten, as well as spending money for “anything (they) did.” Jennings testified that she never considered Collins to be an “employee.” The homeowner’s policy at issue in this case contains a clause that excludes coverage for bodily injuries that arise in connection with a business.

This case highlights the fact that homeowners who take care of another person’s child for pay, even a small amount of money, may be held personally liable if the child they are watching gets hurt and their homeowners’ policies contain business-exception clauses.