I worried about this a bit before we bought Olivia home, as we have a inside dog (who is a short-haired fox terrier who sheds little white *****ly hairs all the time).

In the end though, we just trained him quite quickly that he was not allowed on any of Olivia's blankets or rugs on the floor. So he used to sit about a foot away from her, on the tiles.

From a hygiene and hair perspective we never had any problems at all, and she was never sick at all until she turned a year old, so he did her no harm.

In fact he adores her. He has slept under her hammock/cot since she was about 5 months old, and it is adorable!