Given the increased demand for childcare, operating a daycare service – whether in your home or commercially – can be a wise business decision. However, given the fact that you are caring for other people’s children and the myriad of things that can go wrong, including accidents, injuries, and illnesses, it’s important to safeguard your daycare business with the right type of insurance. So how much does it cost to insure a daycare?
Since there are so many types of mishaps that can occur at a daycare facility, it is important for daycare operators to properly insure themselves and their business. The type of insurance coverage you will need depends on the type of daycare facility you are operating. Some of the types of insurance policies that can benefit daycare providers include:
Renters or Homeowners Insurance. If you operate a daycare in your home, your renters or homeowners insurance policy may cover your business (it’s rare). However, it is important to note that you do need to add your daycare business to your policy, and doing so will involve any additional fee on top of what you are already paying. Many companies don’t offer this coverage. Additionally, even if you do add your childcare business to your renters or homeowner’s policy, the coverage you will receive will be limited. For example, it will not offer coverage for child abuse.
General Liability. This type of insurance policy will offer you broader coverage. It can, for instance, cover things like child abuse and any mishaps that may arise while on or off premises; while on a field trip, for example. Or a parent slips and falls and is hurt on premise. General liability insurance can provide this broader type of coverage at no additional cost.
Professional Liability (errors & omissions insurance). This type of insurance policy will provide daycare owners and operators with coverage for negligence. It can safeguard your business against things like negligent supervision of the children in your care, among other claims that daycare providers are often held liable for.
In short, if you operate an in-home or commercial daycare center, you are going to want to have some sort of liability coverage because when you charge to care for children at a commercial daycare center or in-home location, you face many liability risks.
You have a legal obligation to act with “reasonable care” while supervising children at your location. When a daycare fails to provide reasonable care, & a child becomes sick or gets injured – the provider can be accused of acting negligently and can be sued for negligent supervision.
Believe it or not, lawsuits are filed against child care providers – even when injured child’s parents just think you liable – whether that is true or not. Even frivolous claims need a lawyer to defend, and if the claim is covered by the daycare insurance policy, the insurer pays the defense costs and legal fees. If you don’t have insurance you pay out of pocket to defend yourself – which could cost you thousands to prove you did nothing wrong.
To protect your business you should:
Should someone take legal action against you when a child has become sick or injured under your care and the claim is covered by your liability insurance, the insurance provider will cover the costs of the damages, including the cost of legal defense, as well as settlement fees, should you be found negligent for any claims that are brought against you.
The amount of liability insurance you need is dependent on your specific needs. In some states, daycare providers are required to have liability insurance to get inspected and licensed. If that’s the case, the state will establish a minimum amount of insurance coverage you will need.
Insurance providers take various factors into consideration when determining the cost of liability insurance for a daycare. These factors include whether the service is provided in-home or in a commercial setting and the amount of children being cared for, zip code among other things.
To find out how much a liability policy will cost for the daycare you own and operate, speak to a reputable insurance broker. Also, don’t forget to shop around for quotes before agreeing to a policy. And, remember that price shouldn’t be your deciding factor: a policy that costs less may not provide the coverage that you need, which could end up costing you way more in the long run. Daycare insurance requirements, child care business insurance cost, 3 types of home daycare insurance, how much does it cost to start a daycare business, state farm daycare insurance & dci daycare insurance.
We hope this article on how much does it cost to insure a daycare? was informative. Daycare and childcare providers are liable for the well-being of the children that are in their care. A multitude of things can occur – from injuries to negligence – that could result in a parent or guardian filing a legal claim. To avoid financial turmoil, it is in your best interest to get the best liability insurance possible.
Insurers classify childcare businesses using several coding systems. You can wind up paying more for your insurance if your childcare is not properly classified – like an in-home daycare being coded as a commercial center. Below are the three most commonly used coding systems for commercial daycare insurance:
Here is the official OSHA SIC code description for daycare:
Establishments primarily engaged in the care of infants or children, or in providing prekindergarten education, where medical care or delinquency correction is not a major element. These establishments may or may not have substantial educational programs. These establishments generally care for prekindergarten or preschool children, but may care for older children when they are not in school. Establishments providing babysitting services are classified in Industry 7299. Head Start centers operating in conjunction with elementary schools are classified in Industry 8211.
- Child care centers
- Day care centers, child
- Group day care centers, child
- Head Start centers, except in conjunction with schools
- Nursery schools
- Preschool centers
