Abuse and Molestation Liability for a Daycare

Understanding Abuse and Molestation Liability for a Daycare

Need abuse & molestation coverage for your daycare?

An important type of insurance to have when running a daycare is abuse and molestation liability coverage. This coverage protects a home daycare if the staff or owner is accused of physical or mental abuse and molestation. If someone files a claim against you, this will cost thousands of dollars from lawyer and court fees to the settlement itself. Abuse and molestation liability will cover these fees that normally would sink a business.

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Common Misconceptions:

For in-home daycares with only a single employee, aka the owner of the business, this insurance coverage may seem unnecessary. After all, you know you would never abuse or molest a child. This coverage does more than protect against abuse and molestation crimes. It also protects against abuse and molestation claims. If you are accused of this crime, you would be paying out of pocket for the legal fees and settlement, no matter if you are innocent. It will also be difficult to prove your innocence in the case when it comes down to your word over the victim’s, a child.

Even if you are the only one working at your daycare, there’s still a chance of legitimate claims of abuse and molestation from someone loosely affiliated with the daycare. This could be a next-door neighbor, a family member, or a volunteer. If you go to the bathroom and have a neighbor watch a child in the meantime, you are still responsible for the child. You could be charged for negligence due to their inappropriate behavior. Basically, you are responsible for whatever happens to the child while they are on your property no matter what happens.

Checking Your Current Insurance:

It’s crucial to check your daycare insurance policy to make sure you have abuse and molestation liability coverage. If you aren’t sure, call your insurance provider and ask. While you have them on the phone ask them, what the limits are for the coverage. Many insurance providers will offer the bare minimum coverage to start. They will provide a cap to the maximum claim payment, which this may not nearly be enough if hit with a lawsuit. Some will only cover the court fees and not the settlement itself. This means potentially paying hundreds of thousands of dollars out of your own pocket. If your coverage isn’t enough, you can increase the maximum limit by purchasing extra umbrella liability. If you discover your home daycare insurance doesn’t have abuse and molestation liability, it might be available as an endorsement.

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Reading the Fine Print

Some insurance companies have very specific language when it comes to this type of liability and endorsement. You might think you are covered only to discover in horror the incident is not covered by your policy. Some endorsements will only cover abuse and not molestation. Others will not cover threats of abuse. Another example is most companies will not provide coverage if the abuse is an intentional act rather than an accident to the perpetrator. They might not wait until a guilty verdict to deny coverage either. Some will deny providing coverage for the perpetrator even if the allegations are false. You’ll need to find one who will cover the defense fees in court until the allegations are proven.

If your insurance policy denies coverage to the perpetrator, you’ll want to make sure it will still cover you, the owner, and the business itself for negligent supervision and hiring. In court it won’t only be the perpetrator on trial, the business will be too. Most lawyers for the plaintiff will argue a claim that the employer did not properly supervise the employee or failed to run background checks when hiring the perpetrator.

Having and being informed about your abuse and molestation liability coverage is a great way of protecting your business. There’s still more you can do though. You can run background checks on employees during the hiring process. With your current employees you can implement an abuse prevention plan and training. This can include writing a manual for the training and the prevention plan. Some insurance companies will require you to show proof of the training anyway and if you are taken to court this will help against claims you were a negligent employer. If you plan on keeping your daycare small, make sure you are the only one supervising the children. No neighbors, family members, or friends can come over during daycare hours with no exceptions. When it comes to protecting your business whether financially or socially, one can never be too careful.