What Kind of Insurance Should a Childcare Provider Carry?
Childcare providers are often asked questions about their policies, practices and disciplinary styles by parents and prospective clients, but there’s one area many parents fail to consider: insurance. In fact, liability insurance isn’t even a legal requirement for licensing and daily operation in some states. The unfortunate truth is that many parents don’t discover a lack of liability insurance until a child is injured on a childcare provider’s watch, because most states also don’t require a childcare provider to disclose a lack of insurance. Still, adequate insurance is one of the most important types of protection for a caregiver or facility to possess.
Meeting State Insurance Requirements as a Childcare Provider
As with most legal matters relating to childcare, insurance requirements vary from state to state and are often based upon the size of a childcare provider’s operation.
Complying with all legal requirements for licensing and operation within the state is imperative, but meeting the minimum may not provide childcare providers or their charges with an adequate level of protection. Injuries and accidents are par for the course when young children are involved, and a single serious injury can cause irreparable damage to a childcare provider’s business. The financial burden of medical bills can also create a hardship for affected families, which is why proper insurance coverage is certainly not an area where caregivers or daycare center directors should skimp.
Automobile Insurance for Childcare Providers
While some caregivers and daycare centers don’t make outings or field trips a part of their program, they are fairly common among most. Unless parents will be expected to transport their children to and from these events, adequate automobile insurance is a must. Not only will this coverage provide financial protection from loss related to company vehicle damage, but also to any children who may be injured as a result of an accident.
Too little insurance can be almost as risky as forgoing coverage altogether, as an insufficient policy may provide small payouts to the families of any children injured in an automobile accident involving a childcare provider and their charges.
Business Insurance
There are several types of insurance policy which can provide childcare professionals with a measure of protection, especially since even signed waivers from parents can offer so little in the event of a court battle. The two most common types of policy for a childcare provider are liability insurance and accident-medical insurance. General liability insurance covers claims relating to property damage and bodily injury which occurs as a direct result of your business operations. Accident-medical policies will cover any medical fees or injuries which are sustained while a child is under your care if you are deemed liable for those damages.
Professional liability coverage insures you and all of your employees against loss resulting from your negligence or responsibility relating to your business. Some professional liability policies for childcare providers will include coverage for sexual abuse or molestation claims if they’re proven to be baseless, but childcare providers interested in such coverage should make a point of verifying with their insurance provider.
If you have employees, it’s also important to obtain adequate workers compensation insurance. In most states, this insurance is a requirement for all employees. Workers compensation insurance laws vary from state to state, so it’s always wise to ensure your coverage meets all legal requirements.
Insurance for the Home-Based Childcare Provider
Some states don’t require licensure for small, home-based daycare center until a certain enrollment number is reached. Unlicensed childcare providers who work out of their homes should always evaluate their insurance needs as a business owner. There is a common and pervasive misconception that a standard homeowners insurance policy will provide protection in the event of an injury or accident, but this is often not the case. Instead of assuming your general homeowners insurance policy is sufficient, you should specifically inquire about coverage for home daycare services with your insurance provider. Some companies may offer a rider for extended coverage, but most deliberately specify that the policy will not cover daycare services provided in the home.
The best and most effective way to protect your clients and your business is to determine exactly how much coverage you currently have in place, and how much you need in order to operate with confidence. Speak with an insurance provider to ascertain your current level of coverage, and what you’ll need in order to increase your protection to an adequate level.
