The Simple Answer
To children, particularly before puberty, bodies just have parts and functions. They won't exhibit any inhibition or embarrassment unless it comes from messaging they pick up on from the adults in the world around them, not from within themselves.
A fairly common topic of conversation when discussing parenting, the question of nudity at home is usually a controversial one.
The simple answer is that bodies, in their bare, natural form, are not damaging for a child to see. While research is relatively limited on the topic, there is a general consensus that there is no harm in exposure to parental nudity. One such study states that "Given the vehemence with which clinicians and child-rearing specialists often condemn childhood exposure to parental nudity, it is paradoxical that their dire predictions are not supported by the (scant) empirical work that does exist. Findings are at worst neutral or ambiguous as to interpretation, and there is even the implication of possible positive benefits in these studies (particularly for boys) in domains such as self-reported comfort with physical affection and positive "body self-concept." (Okami, et.al, 1998).
Set Boundaries Around Nudity
One thing parents may worry about is that if they let their children be nude at home, that they will think its okay to be nude anywhere, but most children understand that home is different than elsewhere. They understand that nudity isn't allowed at the store, and its reinforced by the fact that their parent's aren't nude at the store. They also can easily understand that rules around nudity are different for family than when others are around.
Its also okay for not all members of the household to have the same comfort level with nudity. Its important though to let your kids know its for privacy, not shame, embarrassment, or anything else negative.
Be Ready For Questions
Children notice differences between themselves and their parents. Its natural for them to have questions about it. Questions range from why some bodies have hair to why mommy doesn't have a penis (or daddy does). While it may be a little uncomfortable at first to answer these questions, answering them honestly demystifies and explains bodies as the questions occur, leading to a more inclusive and positive approach to addressing these topics than a single "talk." Use actual terms for body parts and explain differences in age appropriate ways.
Be in the habit of asking yourself- what messages do I want my children to understand about their bodies, others’ bodies, and how to navigate the world around them? What am I doing now to support these messages? What may I be doing to hinder these messages?