Insurance for Child Day Care Services
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What Insurance Do Child Day Care Services Need?
Professional Liability Insurance (or E&O Insurance), protects your small business from claims of mistakes, negligence or malpractice made when providing your services that caused somebody financial loss. PLI covers your legal defense costs, damages and settlements.
Workers Compensation covers your employees' medical costs and lost wages while recovering from a work-related injury or illness. The employee gives up the right to sue your company in return for receiving cash and benefits from Workers Compensation. In some states it’s mandatory for businesses!
Commercial Auto Insurance covers your cars, trucks, and vans used in your business. It covers the costs from vehicle damage in collisions, theft, vandalism and weather damage. It also covers medical expenses for to injured parties.
Umbrella Policy adds an extra layer of protection to professionals if a serious event or cumulative claims exhaust your current policy limits. It also covers you for events that would otherwise be excluded from your other policies.
General Liability Insurance protects your small business against claims of third-party bodily injury and property damage, reputational harm and advertising injury. It covers medical bills, repair costs & legal fees.
Cyber Liability Insurance protects you from the theft of sensitive data. If you suffer a data breach or software attack, Cyber Liability Insurance will cover the costs of notifying and restoring affected customers, recovering data and repairing security systems.
Frequently Asked Questions
How much does it cost to start up a Day Care Center?
The average start-up cost can average from $10,000 to $100,000. If you're taking an existing facility, the cost can run at least $55,000 for the renovation alone. Supplies and equipment can cost $60 per child, educational supplies can go total up to $4,800.
Does an affidavit or waiver protect my Child Care Business?
No. An affidavit or waiver would be a red flag to the parents as they assume that you don't have an insurance. Your childcare business would have the potential for numerous lawsuits and you'll have to pay your own legal fees.
Is Child Care insurance a business expense?
Yes. The Internal Revenue Service states that any expenses that are a cost of conducting a trade or business are a business expense.
What does negligent supervision mean?
When parents entrust their children to your childcare business, they expect their children to be adequately supervised inside the facility. Negligent supervision is when a parent believes his/her children were not adequately supervised when an accident happened.
Why do Child Care Services need insurance?
Child Care Services include babysitting, nursery schools, child or infant day care centers, and preschool centers. Running a daycare, nursery school, preschool or babysitting business is no easy task. Parents trust you with those they love most, and when something goes awry during care, they hold you responsible. Whether your child care business is in your home or at a separate location, you need insurance.
What risks could Child Care Services face?
Insurance protects you from high expenses associated with claims and lawsuits. For many child care businesses, insurance is brushed aside. Understanding the risks you face each day is the first step to understanding the importance of insurance.
- Falls: Depending on the time of day, your daycare or nursery school floor may be covered with toys. If a parent walks in to pick up their child, falls, and sprains their ankle, you are responsible for their medical bills.
- Injured Children: Children are unpredictable which means they are prone to accidents. What happens when a child falls off the playground equipment breaking an arm, or is hit by another child and loses a tooth?
- Allegations of Abuse: Nobody wants to think about it, but when you are working with kids, you are at a greater risk for abuse allegations. What may be a simple misunderstanding or miscommunication can turn into a legal nightmare.
- Injured Employees: Daycare employees spend their days chasing, lifting, and playing with the little ones in their care. Injuries in these scenarios happen quickly, and when they do, you will need to pay medical expenses and any lost wages associated with the injury.
- Theft of Sensitive Information: Daycares keep sensitive information on record (electronic and paper formats) including children’s names, birthdates, and social security numbers. If this information is stolen, the cost associated with proper notifications is too expensive for most small businesses to pay.
In addition to these scenarios, you also risk auto accidents, special event/fundraiser claims, property loss, and loss of business income. It’s important to buy insurance specific to your child day care services unique operations and needs.
Do I need Abuse and Molestation Coverage for my Child Day Care Business?
Especially for you as an owner of a Child Day Care Business, it is important to ensure that you are covered when a parent will make a claim that his child was abused. Even though you know you would never abuse a child in your care, in the end, it’s your word against that of the child or parent.
Just someone loosely connected with your Day Care Center like family members or volunteers having inappropriate contact as the result of your lack of supervision can cost your business.
Everyone working with children should buy abuse and molestation coverage to stay worry-free.