Running a daycare can be difficult, even on the best of days. It’s not like any other business. Parents are entrusting you with their young children’s wellbeing. Their child’s development and, most of all, their safety. If you are running an in-home daycare center, you should buy childcare insurance. Children pose a huge possible liability, so it goes without saying that you should be insured for that liability.
For instance, say one of your toddlers slips and falls in your care. Maybe resulting in them hitting their head and needing stitches. The child’s parents could sue you for medical expenses. In this case, if you have home daycare insurance, the policy will help you cover the medical expenses. Namely the ER visit and the stitches. If you don’t have insurance, it could end up costing you a lot of money.
In the USA, home daycare insurance is quite common, but in Canada and other countries, it’s less common.
What is Home Daycare Insurance?
Home Daycare insurance helps cover legal and medical expenses for at-home daycare providers. Even though home daycares have fewer kids in their care, expenses can add up if sued.
Many home daycare owners believe that their home insurance policy will cover their childcare business. But this is not always true. In most cases, you will need a separate policy for operating a home daycare. First, call your home insurance company and ask if adding coverage to your home insurance is an option. Then, compare the costs of a standalone home daycare insurance and adding coverage to home insurance.
What Does Home Daycare Insurance Cover?
Below are the most important liabilities to look for in a home daycare insurance policy:
This covers the costs of replacing damaged equipment, dealing with property damage, and even injuries. General liability insurance protects you in the event someone outside your business is injured on your property. Often called “slip and fall” insurance.
Insurance coverage usually includes:
Commercial General Liability
- Property Damage and Bodily Injury Coverage
- Business Interruption due to an insured peril (Ie. fire, theft, and water damage)
- All Risk Replacement cost for building and/or contents. Coverage includes replacement of equipment associated with the business such as computers, change tables and extra furniture for the daycare.
- Sewer Back-Up
- Natural disasters, like an earthquake
Abuse and molestation liability
Coverages under abuse and molestation liability include fines, legal costs, or medical expenses. These are expenses you have to pay if found guilty of abuse to a child in your care.
West Bend insurance explains that the cost of a meritless abuse or molestation claim,
“A claim of physical or sexual abuse against a child care provider can cost thousands of dollars and take months to defend, even if the claim is 100% meritless. When you consider that the annual cost for $1 million of abuse coverage is only around $5-$10 per child, there is little excuse for not being insured.”West Bend Insurance
Often child care providers believe that abuse coverage is not necessary. Unfortunately, home daycare providers often find themselves confronted with disputes between their word against the word of a child. Or even a deceitful parent.
Legal defense coverage
The insurance company will cover the costs of legal defence services in the case of a lawsuit. Look for insurance policies that offer defence coverage within their policy limit. This will reduce your liability coverage.
Medical coverage will cover the costs in case of medical emergencies. For example, if a child sustains an injury under your care.
Other Optional Coverage
- Cyber Liability
- Critical Illness
- Health & Dental
- Disability Insurance
- Accident & Sickness
Depending on state/province requirements or insurance policies, you may be limited in the number of children you can care for (excluding your own). Moreover, you can be denied home daycare insurance if your property contains certain attractive nuisances, such as a trampoline or swimming pool. Also, some playground equipment may fall under this category, making you ineligible for coverage. Check with your insurance broker if you have any of these items.
Commercial auto liability insurance
If a child sustains an injury in a vehicle operated by you, the commercial auto liability will protect you if a lawsuit is filed. This coverage may not be a part of the insurance policy and you will have to buy this at an extra cost. Most regular auto insurance policies do not cover child care transportation.
How Much Does Home Daycare Insurance Cost?
Home daycare insurance rates depend on the number of children in your daycare at any one time. Usually, there is a fixed flat fee for one child, with a marginal increase for each added child.
For example, the daycare insurance by New England Insurance Services, Inc. (NEIS) charges $534 as an annual premium with liability limits of $100,000 per occurrence and $300,000 aggregate.