Why Do Day Care Operators Need Insurance?
As a day care operator or day care provider, you have a lot on your plate:
- You’re entrusted with a parent’s most treasured possession
- The safety and security of children is your top priority
- You’re responsible for facility maintenance and upkeep
Failing to have right type of insurance or adequate coverage limit leaves your small business vulnerable to unexpected events that are all-too-common in the day care industry.
Real Risks Facing Day Care Operators
With all the chaos that can ensue in a children’s daycare setting, it should be no surprise that having adequate insurance should be top of mind for any business in this industry. The risks inherent in this industry are far greater than bumps and bruises.
- An accident between a company vehicle transporting children between the daycare center and a local park causes damage to another car and injuries to that car’s drivers as well as damage to the company vehicle and injuries to children. The other driver and parents of the children involved all claim damages against the daycare business, which also has to pay for repairs to its vehicle.
- Multiple parents accuse an employee of the daycare center of abusing their children as a form of discipline and file lawsuits against the employee and the daycare center.
- An after-hours fire at the daycare center causes extensive smoke damage to the daycare facility building, requiring repairs and the closure of the facility while repairs are completed.
Risks Vary by State
Most states require some form of childcare insurance for any daycare center. Depending on the size of the daycare company and the number of employees, different states may have further requirements such as business licenses and business insurance.
If you have employees, workers’ compensation insurance and license bonds also are required in most states.
The penalties for non-compliance can be severe. Your license could be suspended if your insurance is insufficient or is not on file with the state authorities. Day cares need to be confident they’re covered for those risks so they can focus on the day-to-day challenges of caring for children.
What Type of Insurance Do Daycares Need?
As with any business, daycares should start their insurance plan with a general liability policy. General liability will protect the business from bodily injury liability, personal property liability, product liability, advertising liability and more. This insurance grows as your business grows and automatically covers new services and business locations as you add them.
While some daycares are simply a single individual operating out of their home, others are large enough to have employees and even company vehicles that might be used to pick up and drop of children at home or for field trips and other activities. In these cases, workers’ compensation and auto insurance are also a must.
Even when performing thorough background checks and with robust safety measures in place, it’s possible for employees to commit bad acts at your daycare. For this reason, abuse and molestation coverage is highly recommended for any daycare.
How Much is Insurance for Day Care Providers?
There are several factors to determine the cost for insurance. The size of your day care in terms of revenue and children you care for, gross sales, where you are located at and the types of services you provide are cost factors. In addition, because of the type of work you do, you should also seek coverage for professional liability, abuse and molestation.
Day care insurance may not always cover the following: employee injuries, subcontractors, the vehicles driven by employees or owners, contractual liability, diseases and viruses. Other exclusions can be found on actual insurance policy declaration pages.