Day Care Insurance Policy Information
Day Care Insurance. The U.S. Census Bureau conducted a survey in 2011 that found that around 6 out of 10 children age 5 and under required child care, with around 6.7 million children attending some sort of day care program.
If you own one of the thousands child care businesses operating in, your business model is not complete until you find a suitable day care insurance policy to protect you from liability if you ever face a lawsuit or claim. Daycare providers face many legal liabilities in the operation of their facilities.
Day care centers provide care to babies and children while their parents are working. Some offer part-time drop-in care while parents are exercising, shopping, or doing other activities. Others offer before-school or after-school care for older children. Services include at least one meal a day, snacks, activities, naps, indoor and outdoor play areas, and various learning opportunities. They may take students on field trips. These facilities are generally open five days a week but do not offer overnight stays. Prescribed medication can be administered, but most day care centers do not have staff nurses.
Operations are generally subject to state licensing, although some states exempt those serving a small number of children or those run by religious institutions. The license issued establishes the number and ages of children who can be cared for, as well as the adult to child ratio.
Daycare insurance protects your child care business (in-home or commercial) from lawsuits with rates as low as $57/mo. Get a fast quote and your proof of insurance (certificate) now.
Below are some answers to commonly asked childcare and daycare insurance questions:
- What Is Daycare Insurance?
- How Much Does Daycare Insurance Cost?
- Why Do Daycares Need Insurance?
- What Type Of Insurance Do Childcare Providers Need?
- What Does Day Care Insurance Cover & Pay For?
What Is Daycare Insurance?
Daycare insurance is a type of insurance policy specifically designed for businesses that provide care for children, including daycare centers, preschools, and in-home daycare providers.
It covers various aspects of the daycare business, including liability for accidents or injuries to children in the care of the daycare, property damage, and business interruption. This insurance provides financial protection against lawsuits, damages, and other related expenses in the event of a covered claim. It also offers protection for the daycare owner against loss or damage to the building, equipment, and other assets.
How Much Does Daycare Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small commercial daycares ranges from $57 to $79 per month based on location, capacity, services offered, payroll, claims history and experience..
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small home-based daycares ranges from $37 to $59 per month based on location, capacity, services offered, payroll, claims history and experience.
Why Do Daycares Need Insurance?
Like any other business, a day care owner faces risks and perils that endanger the business; day care insurance puts a buffer between your business and the potential harm that can result if you or one of your employees find yourselves facing a liability case.
Operators of day care centers and in-home child care providers should have special business insurance that meets the unique requirements of their businesses. Day care insurance provides day care owners with liability and business property insurance coverage to protect them from unforeseen events.
Child care policies are available in customizable coverage options that allow the owner of the day care to choose a policy that is centered on their individual requirements.
Whether you are a child care operator in your own home or own a center, you should consider day care insurance. requires that the center or child care provider maintain this type of coverage.
The Department of Health and Human Services, or DHHS, in require liability coverage for day care centers and in-home care providers prior to being licensed to care for children.
The Department may have strict regulations with which the business must comply, and some insurance companies may have even stricter guidelines that affect the costs of buying day care insurance. The aim of these requirements is to limit day care operators and providers from exposure to liability claims.
In-Home child care based day cares should not simply expect that any liability claims arising from their child care activities are covered by their homeowner's policies; this is often not the case.
In fact, some insurers may even refuse the homeowner a renewal policy if they unearth the fact that the homeowner is running a business from home without purchasing a separate policy to cover any liability arising from the operation of the business.
What Type Of Insurance Do Childcare Providers Need?
Because of the litigious nature of the modern world, day care businesses in are at risk of being sued by parents for accidents, injuries, or allegations of abuse or neglect.
Even if legal action is fruitless and the suing party ends up not being awarded any monetary damages in court, the fallout still costs the business in terms of legal fees to defend itself from the claim. Liability insurance for day care operators provided coverage for legal costs and any sort of fees associated with defense.
Daycare Liability Insurance Coverage
Some terms you may see when discussing day care insurance coverage include:
- General liability coverage. This type of coverage is an essential for any day care business including in-home child care that allows members of the public access to its premises and is required in to get your license. This coverage takes care of costs from injuries that third parties sustain on the premises, and it is a vital part of being insured as a day care provider. Even the smallest injuries, falls, or accidents can leave an uninsured provider digging in her own pocket to cover medical expenses.
- Premises liability coverage. Parking lots and play areas are notorious for accidents, and premises liability covers any such accidents for the day care provider, paying medical costs and related claims that occur outside the actual facility, whether it's a broken arm from a fall from a swing or some other accident or injury.
- Commercial vehicle insurance coverage. For day care businesses that use company vehicles to transport children, commercial vehicle insurance is essential. This insurance pays costs associated with property damage and injuries when day care employees are involved in accidents.
- Corporal punishment liability. Your day care business can be held liable if a worker strikes a child or administers corporal punishment. This type of coverage protects your business in the event of such a claim.
- Molestation and abuse liability. No day care provider wants to think that an employee is capable of such acts, but it does happen, and it leaves day care owners open to abuse if they do not have liability coverage.
- Umbrella coverage. For claims and awards that exceed the amount of coverage on a standard policy, an umbrella policy picks up and pays for additional awards beyond the scope of the policy, protecting the owners' assets from attachment if a large award is granted in a claim.
Child Care Property Insurance Coverage
As a day care owner, you likely have a large amount of money invested in your property, included equipment and facilities. For this reason, having coverage on the building that houses your day care and the contents of the building is crucial including in-home child care.
Building coverage provides protection from damages to the building you use for your center, whether that damage arises from severe weather, property crimes, or even falling objects. Flood and earthquake protection may also be necessary, depending on the area where you live.
When selecting coverage be sure to include protection for the contents of the day care center. This might be furniture, electronics, toys, and cribs, among other items. If the property suffers a loss due to fire, theft, vandalism, and so forth, this coverage ensures you can replace what's lost and stay operational.
Protection is also necessary for the outdoor equipment that you have invested in for your business. Swing sets, play walls, and other items can become damaged or stolen, so maintaining insurance for these items is also important.
Other Day Care Coverage Considerations
Beyond the basics - it is important to think of other things that you need day care insurance for, so the business is covered from all potential perils. For example, you might need:
- Field trip coverage. This type of protection provides both property and liability coverage for providing child care to children away from your usual location.
- Special events coverage. For fundraisers, pageants, and other similar events hosted at your facility, insurance that covers any accident claims arising from the event can ensure that your business isn't out of pocket for liabilities or claims.
- Lost income insurance. Should your child care business need to close because of a covered peril, lost income insurance helps you pay salaries and expenses until it is operational again.
- Worker's compensation. If you have employees, worker's comp is likely required for your business and covers employees' accidents, illnesses, injuries, or deaths due to job-related service.
Child Care And Daycare Risks & Exposures
Premises liability exposures are extremely high due to the ongoing presence of young children. To prevent slips, trips, or falls, all areas must be well maintained with floor covering in good condition. The number of exits must be sufficient and well marked, with backup lighting in case of power failure. Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls.
The adult/child ratio should be low enough to permit adequate supervision. Evacuation drills should be conducted regularly. Procedures should be posted that address all emergencies, with instructors and aides trained in their use. References for all employees and volunteers must be verified, including criminal background checks. Access to the building must be limited during operating hours to prevent kidnapping and to keep children from wandering away. The procedures in place for delivery and pickup or release of children to adults must be followed very carefully.
Playground equipment must be well maintained to prevent injuries. Children learn by touching and sharing, which increases the spread of communicable diseases to others. Immunizations for each child should be required, along with emergency medical contact information. Written policies must be established that address when a child is too ill to attend and when the facility will contact parents or medical emergency providers in case of illness or an accident.
Abuse and molestation exposures must be considered when employees supervise children. The abuser is never covered under the center's policy. While there is some coverage for the facility where the abuse takes place, it is very limited. More comprehensive coverage should be purchased from specialized markets. The facility is responsible for taking all possible care to protect students from predatory adults and older students through background checks, monitoring, supervision, and by reporting all allegations of abuse to the proper authorities. The more vulnerable the potential victim, the more vigilant the facility must be.
Workers compensation exposures are high from hernias, back sprains, and strains from lifting, slips and falls, and exposure to communicable diseases. All employees should have up-to-date immunizations to prevent the spread of communicable diseases. Children can become unruly and injure employees by biting, hitting, kicking, and pulling hair or earrings. Employees should be trained in how to deal with these students and have access to emergency numbers in case of problems. Unauthorized visitors can pose a threat to employees as well as children.
Property exposures include an office, kitchen, classrooms, and outdoor play areas. Ignition sources include electrical wiring, stoves for cooking, and heating and air conditioning equipment. All wiring must be well maintained and up to code. Overriding circuit breakers and fuse boxes should not be allowed. The high volume of paper, craft supplies, toys and other items contribute to the spread of fire. Wood and/or plastic furnishings increase the fire load. Most equipment is susceptible to and easily damaged by fire. While food preparation is generally limited to stovetop or microwave cooking, any cooking increases the fire loss potential.
Crime exposures are primarily from employee dishonesty. Hazards increase without proper background checks. All job duties, such as ordering, billing, and disbursing, should be separate and reconciled on a regular basis. Receipts should be issued for cash payments received from parents. Bank deposits should be made on a timely basis to limit the buildup of cash on the premises. Audits should be performed at least annually.
Inland marine exposures are from accounts receivables if the center offers credit, computers, and valuable papers and records for students' records. Duplicates of all data should be made and stored off premises.
Commercial auto exposures are very high if the facility transports children to and from their homes or to off-premises activities. All drivers must have the appropriate license for the type of vehicle used to transport children and have acceptable MVRs. Car seats must be used as required by state law. Appropriate supervision should be provided when multiple children are transported. All vehicles must be properly maintained and maintenance records kept at a central location.
What Does Day Care Insurance Cover & Pay For?
Daycares can face lawsuits for a variety of reasons, including:
Negligence: Daycares may be sued for negligence if they fail to adequately supervise children, resulting in injury or harm. For example, if a child falls off a playground equipment and suffers injuries due to lack of supervision, the daycare may be sued for negligence.
Insurance can help pay for the lawsuit in this case through general liability coverage. This type of insurance typically covers bodily injury and property damage caused by the daycare's negligence. The insurance company can pay for legal fees, court costs, and any settlement or judgment against the daycare up to the policy limit.
Abuse or Neglect: Daycares may also be sued for abuse or neglect if a staff member mistreats or harms a child in their care. For example, if a daycare worker physically abuses a child, the daycare may be held liable for the harm caused.
In this case, the daycare would need a specialized insurance policy called abuse and molestation coverage. This coverage typically covers allegations of sexual abuse, physical abuse, emotional abuse, or neglect. The insurance company can pay for legal fees, settlements or judgments, and other related costs.
Property Damage: Daycares may be sued for property damage if a child damages someone else's property while under the daycare's care. For example, if a child breaks a neighbor's window while playing outside, the daycare may be held responsible for the damages.
In this case, the daycare can rely on their general liability insurance to pay for the lawsuit. The insurance company can cover the cost of damages, legal fees, and other related expenses.
Breach of Contract: Daycares may be sued for breach of contract if they fail to fulfill their obligations to parents or guardians. For example, if a daycare promises to provide a certain level of care or educational services but fails to do so, they may be sued for breach of contract.
In this case, the daycare would need professional liability insurance, also known as errors and omissions insurance. This coverage can pay for legal fees, settlements or judgments, and other related costs if the daycare is found liable for breaching their contract.
Overall, insurance is critical for daycares to protect themselves from the financial consequences of lawsuits. It is important for daycare providers to carefully review their insurance policies to ensure they have the right coverage to protect them in the event of a lawsuit.
Commercial Insurance And Business Industry Classification
- SIC CODE: 8351 Child Day Care Services
- NAICS CODE: 624410 Child Day Care Services
- Suggested Workers Compensation Code(s): 8869 Child Care Center - All Employees Including Clerical, Salespersons & Drivers
8351: Child Day Care Services
Division I: Services | Major Group 83: Social Services | Industry Group 835: Child Day Care Services
8351 Child Day Care Services: 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
Daycare Insurance - The Bottom Line
Work with a commercial insurance specialist to find out what types of coverage are essential for your business be it a commercial center or in-home child care - prior to opening your facility. If you are already operating, have the agent review your needs and risk tolerance to determine if additional day care insurance is needed. Daycare insurance requirements, child care business insurance cost, in home daycare insurance, 3 types of home daycare insurance, dci daycare insurance, state farm daycare insurance, commercial daycare insurance, home daycare insurance companies.
Additional Resources For Additional Resources For Children & Pet / Dog Care Insurance
Discover what small business commercial insurance policies cover for children and pet related businesses.
- Day Care Insurance
- Dog Walking
- Pet Groomer
- Pet Sitting
- Specialty Animals And Birds
A childcare center needs insurance for several reasons. First and foremost, insurance provides financial protection in the event of an accident, injury, or other unforeseen circumstances.
For example, if a child is injured while at the daycare, the center could be held liable for medical expenses and other damages. Insurance can help to cover these costs, protecting the daycare and its owners from financial ruin.
In addition to protecting against financial risk, insurance can also help to protect the reputation of the daycare. If an accident or injury occurs, the media and public may become involved, potentially damaging the reputation of the daycare. Insurance can help to mitigate this risk by providing support and resources to handle the situation.
Finally, many states and localities have laws and regulations that require daycare centers to have certain types of insurance coverage. For example, some states require daycare centers to have liability insurance to cover the costs of accidents and injuries that occur on the property. Failing to carry the required insurance could result in fines or other penalties.
Pet related businesses, such as pet stores, grooming salons, and animal hospitals, need insurance for a number of reasons. These businesses often handle a large volume of dogs, cats and other animals and can be prone to accidents and unexpected events.
For example, a pet store may be sued if an animal becomes sick or injured after being purchased from the store. An animal hospital may be sued if a pet owner believes their animal received inadequate care. A grooming salon may be sued if an animal is injured during grooming.
In these situations, insurance can provide financial protection for the business and help cover the cost of legal fees and settlements.