Insurance For Daycare Centers

Insurance Policies to Consider For Daycare Centers

Insurance and Licensing

Insurance policies are controlled by their respective states. Depending on the type of service you provide and the state you’re situated in, you may be subjected to different laws and regulations. Children’s daycare facilities and family child care homes in California are subject to whole other regulations. A license is normally required for service providers. However, there are a few exceptions. Liability insurance for family caregivers is also mandated.

Even if the state does not mandate it, all child care providers should have a minimum level of liability insurance. Both in-home and out-of-home child care providers must have insurance coverage.

The Dangers of Daycare

Several dangers might lead to lawsuits in the child care industry. Here are a few examples:

• Slips and falls
• Child quarrels
• Falling objects
• Defective toys or equipment
• Food tainted with pathogens
• Ingested toxic compounds 
• Carelessness of employees
• Claims of molesting or abusing children
• Inability to meet the expectations of parents in terms of quality of service

Liability Insurance

A daycare center or childcare provider requires general, professional, and automobile liability. A company owner’s policy or other package policy can be included in this insurance coverage, but you can also purchase it on your own.

Owners of child care facilities should not rely on their homeowner’s policy without consulting their insurance provider. This is critical, as many homeowners’ plans exclude coverage for business-related losses. A homeowners’ policy might provide coverage for a home-based child care business, but only if it is specifically endorsed.

If a kid in the care of a child care center or a visitor to the facility is wounded on the premises, the business in question will be held liable.

General liability insurance covers most of the hazards mentioned above. This coverage applies to claims against the provider or its employees for damages resulting from an accident. 

Responsibility for Mistakes and Negligence of the Staff

If a child care provider fails to meet the plaintiff’s expectations, they can be held liable for the resulted damages. Let’s say a provider promises in its sales brochure that all children will learn their ABCs within the first year at the institution. Parents have the right to sue the provider if their children haven’t mastered the alphabet within 18 months of care. If the children don’t get accepted into a high-quality pre-school program, parents can sue the organization. Such lawsuits are covered by errors and omissions insurance. Liability or package policies might also include this coverage.

Automobile Insurance for Businesses

A child care center needs automobile liability insurance to cover claims from accidents involving vehicles owned or leased by the business. A provider’s personal auto coverage should not be used to cover claims against the company. In many cases, personal insurance policies do not cover claims against businesses, other than in the case of sole proprietorships. Therefore, a personal insurance policy might not be sufficient for the company.
 

A child care provider requires non-owned motor liability insurance if any of its workers or volunteers drive their cars for the benefit of the business. This coverage can typically be added to a rental car’s liability insurance for a little fee. 

Additional Coverage

• When the primary liability policy’s limits have been exhausted in the payment of claims, a commercial umbrella policy provides additional coverage. Accidental injury claims can be highly expensive. Therefore, child care providers should look into this coverage.
• Workers’ compensation insurance may also be necessary for child care services. Workers’ compensation insurance requirements are mandated by state law. As long as a business has at least one employee, several states require this coverage. 
• A child care center also requires commercial property insurance. Protecting the company’s assets like buildings and playground equipment is the primary purpose of commercial property insurance. A business owner’s policy typically includes property coverage.