I'm concerned about the point of view that if the nanny is in charge, she is responsible for any damage the child does.
If the nanny takes the child out in public, and he damages something, would we expect her to pay for it?
Suppose she takes him to a children's matinee, and he throws a Coke on another patron, who wants his clothes dry-cleaned. Would the nanny be expected to pay for that? Should she be expected to predict that giving him refreshments would lead to him throwing them?
Suppose he took off his shoe and threw it at her plasma TV. Would she be responsible for paying for the TV?
If she were babysitting him in his home, and he throws something and breaks it, would she be responsible for reimbursing the parents for their property?
I think you'd have to be paying a nanny a lot more than most nannies make, if you were going to expect her to assume financial liability for any and all damage the child does while in her custody. As someone pointed out, it's impossible to watch a child every minute, without being the sort of controlling person that would probably infuriate most 4 year olds (never leaving them alone, making them accompany you to the bathroom, stand next to you while you prepare meals, etc.).