Starting a home daycare is a great way to make a difference in children's lives, but running a daycare business can be costly and risky if you're not properly insured.
Purchasing home daycare insurance for your business will help you protect yourself, your business' finances, and the children you care for if your business is faced with legal action.
What is daycare insurance?
There are a lot of things to consider when starting a daycare business. One of the most important things to consider is daycare business insurance. Daycare business insurance helps you protect your personal assets and your business in case of injuries or accidents that may happen to a child while in your care. Daycare business insurance also provides financial protection against potential lawsuits.
Three types of home daycare insurance
The insurance requirements for your daycare will vary based on your state's licensing requirements, the number of children in your program, and the type of daycare business you have. Therefore, it is important to do careful research and choose insurance policies that will meet your business needs and protect you, your business, and your employees from liabilities.
Home daycare owners should consider three types of home daycare insurance: homeowners insurance, liability insurance, and errors and omissions insurance.
Homeowners insurance
Homeowners insurance protects your home daycare business in case of loss or damage to your home, property, assets, and personal belongings. However, not all homeowners insurance policies cover home daycare liabilities.
If your homeowners insurance policy does not extend to home daycare businesses, you will need to purchase an additional policy to protect your daycare business. The additional policy will protect your daycare business from property damage, fire, vandalism, theft, and other risks to your property. The coverage can also extend to protect you if a child is injured or has an accident while in your care.
Liability insurance
Liability insurance is a broad insurance policy that protects your daycare business in case children, families, or employees are injured on your premises or in your care.
Home daycare businesses need general liability insurance, commercial auto liability insurance, corporal punishment liability insurance, and abuse and molestation liability insurance.
General liability insurance
General liability insurance, also known as "slip and fall" insurance, protects your home daycare business if you are accused of property damage or if a child or family is injured on your premises. General liability insurance also covers potential court costs and legal fees incurred by your home daycare business.
General liability insurance covers:
- Damage to equipment and supplies (such as furniture, toys, appliances)
- Property damage due to natural disasters
- Property damage due to vandalism
- Reputational damage
- Physical injuries that children sustain while in your care
Commercial auto liability insurance
If you transport children to and from your home daycare business, you need commercial auto liability insurance to cover the cost of damages and potential lawsuits you may incur if your business's vehicles are in an accident.
Commercial auto liability insurance covers:
- Payment for treatment of your passengers' injuries
- Medical bills and repair bills if the other driver is at fault but is uninsured or underinsured
- Collision damage
- Comprehensive damage to your vehicle that is not directly caused by an accident
Corporal punishment liability insurance
Corporal punishment liability insurance protects your home daycare business financially against claims that your staff members hit or otherwise physically injured a child.
Abuse and molestation liability insurance
Abuse and molestation liability insurance protects your home daycare business financially against claims that a child was abused or molested while in your care.
Errors and omissions insurance
Errors and omissions insurance, also known as E&O insurance or professional liability insurance, protects your home daycare business financially against business errors and negligence claims.
Errors and omissions insurance covers:
- Children's injuries caused by a lack of supervision
- Failure to provide promised services (e.g., promising to teach a toddler to write their name within the first month of attending your program)
- Professional oversights or mistakes (e.g., feeding peanut butter to a child with a peanut allergy)
How much is home daycare insurance?
The cost of home daycare insurance can vary widely, depending on your location, the number of employees you have, the number of children you care for, and the types of policies your daycare business needs. Generally, insurance premiums for a home daycare can range anywhere from $400 to $1,500 a year.
Protect yourself and your business with home daycare insurance
Being a business owner comes with many risks, especially in the childcare industry. Purchasing home daycare insurance can protect your business from some of those risks and give you peace of mind if an unfortunate event occurs.
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