Does a Home Daycare Need Insurance?

If there’s anything we learned in 2020 is to be prepared for the unexpected. The best way to protect yourself from the unexpected is by having insurance. Anyone who has a business should have insurance to protect themselves, their company, and their workers. This includes those with an in-home daycare.

Insurance policies change depending on the state. In a large portion of states, they require you to have home daycare insurance in order to meet the home daycare licensing requisites. Therefore, no insurance equals no daycare. 

Liability Insurance:

Having insurance protects your business from being sued by parents when there’s accidents, injuries, or allegations of neglect or abuse. The liability insurance will cover court and legal fees. There are eight types of liability protection. There’s general, premises, professional, commercial vehicle, non-owned/ for-hire auto, corporeal punishment, abuse and molestation, and umbrella. General insurance liability is the most common as it is necessary for any business that allows other people onto their property. This will be the insurance that prevents little Tommy and his parents from suing you if he falls and breaks his arm at your daycare. Premise liability covers the area outside of your home daycare such as the areas for parking and any outdoor play area. If you hire any staff members, you’ll need professional liability. Professional liability is used in the case of an employee being neglectful or indifferent resulting in a child’s needs and safety to suffer.

The corporal punishment liability is in case one of your employees hits a child or is accused of it. Unfortunately, you’ll need abuse and molestation liability too. It’s horrible, but your business will need this in case you discover an employee has abused or molested a child. You might need commercial vehicle liability only if you have a specific company-owned vehicle used strictly for picking up and dropping off children to and from your daycare. If you don’t own a company vehicle, but have employees consider getting the non-owned or for-hire auto liability. This will be used if an employee is using their own vehicle to transport children. Having umbrella liability is extra protection just in case the other coverage isn’t enough.

Property Insurance:

When you’re running a business out of your home, there is always the chance for it to get damaged. What if a child accidentally breaks one of your windows when playing catch outside? It’s not just your home anymore. It’s a part of your livelihood. If you no longer have a home, you no longer have a place to run your daycare. Property insurance will protect the building, contents, and the outdoor equipment. The outdoor equipment will cover sand boxes, playground equipment, and anything fun a child can play with outside. The contents coverage provides cover for any indoor items of the daycare like toys, books, electronics, etc. What is great about this coverage is that you will be reimbursed for the cost of an item if it gets stolen, lost, or damaged. Children lose and accidentally steal toys all the time. It is reassuring to know purchasing must have items like toys won’t put you in the red. 

Additional Coverage:

You may need additional coverage if you plan on taking field trips or hosting special events. Extra coverage will be needed for workers compensation in case an employee hurts themselves on the job. Purchasing lost income insurance will cover your daycare in case you are forced to close due to a covered incident. The extra insurance might not be necessary for your business and will cost extra. However, the more insurance you have the safer your business will be against the unpredictable.

Some people believe they don’t need to get business or home daycare insurance. They believe since they are running an in-home daycare, their home insurance policy covers them. This isn’t true. In fact, if your insurance company discovers you’ve been running a daycare in your home, they could refuse to renew your policy for the following year.

Having insurance isn’t just about protecting your business. There are other benefits too. One of the biggest benefits to insurance is it significantly reduces stress when something catastrophic occurs. Instead of wondering how you’ll financially afford to rebuild your life, you’ll be able to focus on what matters: your mental and physical health. Having insurance will lessen your stress before a catastrophic event occurs too. No more will you be unable to sleep at night because you’re wondering what will happen if a fire or a tornado comes for your house. With insurance you know your business and home are protected.

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