Are you a small business owner who wants to open up your own day care? Join the club. Here’s your complete guide to dealing with daycare insurance!
Over 11 million children aged five and below across the United States take part in childcare arrangements every week.
Working parents with no access to childcare solutions miss out on work. Consequently, organizations lose around 4.3 days of work from parents who take time off to sort childcare breakdowns. Running a childcare center is, therefore, a lucrative business providing a social service.
But operating a childcare business isn’t all rosy. You expose yourself to many risks should something go wrong. Keep reading to find out how day care insurance can help you mitigate these risks.
Defining Day Care Insurance
Childcare insurance is a kind of business insurance that is intended to meet the particular requirements of childcare businesses. For people running a childcare company, this class of insurance offers critical protection against any liability or other matters surrounding the business property.
If you own a childcare business, you have to ability to combine several options into your daycare insurance policy. Thus, you aren’t lampooned with a generalized group but have room to create a policy that caters to your center’s specific circumstances. For anyone operating in what is a niche industry, that flexibility can be a lifesaver.
How to Tell If You Need Childcare Insurance
Regardless of where you operate your childcare business, you must take the insurance question seriously. That is particularly true for those childcare businesses that are not required by law to get insurance for their license to be validated.
For nursery schools and childcare centers, having a valid liability insurance policy is a must. Without such a policy, the Department of Health and Human Services (DHHS) will not grant you a license.
Since most states in the country will require you to have a valid license if you want to operate a legal childcare business, it becomes a must-have.
If you plan on opening a childcare center or nursery school, you should know that the DHHS will require you to follow strict guidelines. To make sure that childcare businesses will comply, the DHHS will often carry out on-site evaluations.
Furthermore, your insurance provider will likely have stricter requirements than the DHHS. The rigorous rules and their enforcement are meant to help you avoid being exposed to liability lawsuits.
When it comes to home-based childcare businesses, things are different. The DHHS does not require you to have a liability insurance policy before it can license you to start operating.
However, your homeowner’s insurance policy in such cases may demand that you include a business insurance policy. If not, you may be asked to buy specific endorsements that can protect your business.
One common insurance myth that home-based childcare business owners have is that their home policy will cover business-related bodily damage. That is just not true.
Your homeowners’ insurance policy will not cover any damage to property or bodily harm arising from you running a home-based childcare company. If anything, some providers might refuse to renew your home policy.
What Childcare Insurance Will Cover
As a prospective childcare business owner, you need to understand the things a childcare insurance policy will protect you against. More importantly, you need to find out what such a policy will not protect you from to help you further assess risks.
Here are some types of uncertainties a childcare insurance policy can protect you from.
1. General Liability
If you run a business that welcomes the general public onto its property, you need a general liability policy. As a childcare business, such a policy is critical as children tend to injure easily due to their constant running and playing.
Should anyone who enters your business premises get injured, you will be able to cater to any medical or legal suit costs. The same applies to any property damage by the public inside your premises.
2. Corporal Punishment Liability
Anytime your employees strike a child or administer corporal punishment, they expose you to substantial liability. A corporal punishment policy can help protect you financially should you face any legal claim from such a situation.
3. For-Hire or Non-Owned Auto Liability
If you or your staff happen to drive the children in a privately owned vehicle that gets into an accident, such insurance becomes necessary. The policy will protect you from costs associated with injuries or damaged property when a private car is used for company business.
4. Commercial Auto Liability
When company-owned vehicles cause injuries and/or suffer damage, a commercial auto liability policy will help you settle any associated expenses.
5. Abuse and Molestation Liability
While you hope that you hire staff after thoroughly screening them, bad apples can still get through your radar. If such an employee sexually assaults the children or abuse them in any other way, you can be on the hook for substantial fines.
In such a case, your firm may have to pay steep medical costs and hefty fines that can drain your resources. An abuse and molestation insurance policy helps protect you from potential financial ruin at such times.
6. Field Trip Insurance
Taking the children to places away from the business premises is part of their learning and growth experience. However, such trips can be fraught with accidents that might cause bodily harm or damage your property. Having a field trip insurance policy can protect you from such risks as you provide off-site childcare services.
7. Workers’ Compensation
Workers’ compensation is an insurance policy that helps you meet medical expenses associated with on-the-job injuries to your workers. Each state has its own regulations surrounding workers’ compensation, and you should consult an experienced lawyer to become compliant.
Speak to your insurance provider to find out if they offer workers’ compensation as a supplement to your policy.
8. Lost Income Insurance
Accidents and other unforeseen adverse events happen to every business, and when they do, it means you lose out on making money due to downtime. Taking out a lost income insurance policy can help you bridge the revenue you’d have lost. As a result, you can keep paying your staff despite temporarily closing your doors.
Protect Your Childcare Business from Risks
Operating a childcare business is both profitable and beneficial to society. However, that does not mean you won’t face any problems. Working with children can expose you to several risks. Consider taking out a tailor-made day care insurance policy to protect against these risks.
Oxford Risk LLC has 50 years of helping organizations protect themselves through insurance. Contact us today to learn how you can take the risk out of running your childcare business.