Unlike many companies and industries, daycares are not in the business of selling things; they are in the business of taking care of people. Parents entrust child care centers with their most precious and irreplaceable assets – their children. This puts daycares in a position for unique risks that require customized commercial insurance solutions. At Burstad Insurance, we help daycare owners find coverage that minimizes financial susceptibility to lawsuits, physical damages, and more.
Does Your Business Need Daycare Insurance?
Virtually all businesses need various types of insurance, including daycares, nursery schools, and child care centers. This also accounts for in-home daycare operations, for which owners are often the sole operators and caretakers. In fact, insurance is often a requirement for federal and state licensure– not to mention that many parents will only enroll their children in fully licensed and insured facilities. Furthermore, stand-alone daycare centers may be required to purchase coverage per the terms of a lending agreement, and home daycare providers may be required to purchase liability and property damage coverage for a home business in order to maintain or renew a homeowners insurance policy. These coverages are designed to protect the continuity of your business and safeguard you against major financial damages due to litigation or covered loss events.
Types of Daycare Insurance Coverage
Daycare insurance is often comprised of several coverage types and policies. Some are designed to protect your business property, while others can help cover the cost of litigation and financial liabilities. There may also be additional insurance coverages to suit specific needs, such as the risks of taking students on a field trip or hosting special events at your facility.
Daycare Property Insurance
Property insurance needs can vary based upon the size, location, and physical assets of your business. If your daycare is in your home, your home insurer may require property coverage that pays for damages caused by business operations. If your daycare is located in a secondary location, you may need more extensive property insurance for your structure, signs, interior fixtures, and more. There are several types of commercial property insurance available to daycares, some of which include:
Structural and Contents Coverage
This helps compensate your business for necessary repairs or reconstruction of the structure your daycare is located in. This generally includes the building your business is housed in, its signage, and property inside the daycare, such as cribs, computers, toys, and more. Structural and contents insurance coverage is generally limited to damages caused by certain types of covered events, such as fires, wind, theft, vandalism, and falling objects. Note that you may need contents coverage, but not structural coverage, if your daycare rents the space it operates from.
Imagine trying to maintain an orderly daycare or childcare center with no playground equipment. Considering the high cost of these types of structures, we recommend talking with an independent agent to find out how you can extend your coverage to include swing-sets, sandboxes, playgrounds, and more.
Daycare Liability Insurance
The cost of defending yourself against a lawsuit could total thousands or even tens of thousands of dollars. Add in the cost of any judgments and settlements, and it is easy to see why liability insurance is such an important part of protecting your business. Your childcare center may need several different types of liability protection. Examples include:
This type of coverage can protect your business against general claims of negligence that resulted in a third-party injury or property damages. This coverage can pay for medical bills and judgments, as well as legal fees – even if the suit against you is dropped.
Commercial Vehicle Liability
Many daycare centers offer school pick-up services or otherwise use vehicles to transport children on field trips. These vehicles should be covered by commercial insurance protection that protects your vans and buses against damages and also protects your business against accident liability. Note that you may need a different type of coverage – non-owned auto liability – if you allow your workers to transport children in privately owned cars instead.
Despite rigorous background checks, sexual predators can still find jobs at daycares and childcare centers. If your employee is accused of sexual misconduct with a child, this coverage can help cover fines against your business, as well as other financial losses.
Physical Abuse/Corporal Punishment Liability
If your employee harms a child physically, your daycare business can be held liable. This coverage helps pay for financial damages if your staff is accused of administering corporal punishment.
Commercial umbrella insurance is used to supplement the liability coverage in a primary insurance policy. If, for example, legal fees and judgments consume the entirety of your general liability limits, you may be able to make a claim against your umbrella insurance for the remaining damages.
Additional Coverage Types
In addition to property damage and liability insurance, your daycare center may benefit from other commercial coverage solutions, too. Examples include:
You may still have ongoing business expenses, including payroll costs and utility bills if your business is forced to close due to a fire or some other loss event. Talk to an agent about insurance that can help with the continuation of income if your business must temporarily close due to a covered event.
If you employ workers at your childcare center, you must purchase workers compensation. This coverage provides no-fault benefits when a worker is injured on the job. Not only does it provide the employee with compensation of lost wages and medical expenses, but it can also help protect your business by discouraging potential litigation.