Daycare Insurance: what you need to know
As a daycare provider, you understand that no two days are alike. You’re continually moving from one urgent task to the next—refereeing a dispute over a blue crayon one minute and doing bookkeeping or meeting with parents the next. This unpredictability is why daycare insurance is so important.
Even the most careful and attentive business owner can’t prevent every scraped knee or completely avoid property damage. Accidents can happen in the blink of an eye, and any incident can lead to legal action or a costly repair.
Fortunately, daycare insurance can protect your business. These types of business insurance are the barrier standing between your business and the kind of unexpected costs that could close your doors for good.
The reality of risk in childcare
It is easy to think, "I’m careful, so I don’t need to worry." But risk in the childcare industry is unique because it involves unpredictable little humans. You aren't selling a product or providing a service focused on adults. You’re supervising active children who are prone to exploring, climbing, and occasionally falling.
Even when they aren’t being especially curious, there are risks. A toddler might trip over a rug edge and need stitches. A parent rushing to pick up their child might slip on a wet patch in your entryway. These aren't mistakes on your part, but if a parent decides to sue to cover medical bills or lost wages, the costs can mount quickly.
Standard homeowners insurance policies rarely cover business activities and usually explicitly exclude coverage for family daycare operations. Relying on a personal policy for a business risk is a gamble you usually won't win.
Then there are property risks. A storm could damage your roof, or a kitchen fire could ruin your supplies. There is also the professional side of things. What if a parent claims you failed to supervise their child adequately? Even if the claim is baseless, defending yourself against it requires money for lawyers and legal fees. Childcare insurance is designed to handle these specific curveballs so you don't have to pay the costs out of your operating budget.
biBerk daycare insurance policies you should consider
Most childcare businesses, whether they are large centers or home-based operations, build their protection around a few key policies. Think of this as your safety net.
Having the policies below allows you to stay focused on caring for kids without worrying about the financial repercussions of incidents.
General Liability insurance
This is the bread and butter of business protection. If someone who doesn't work for you gets hurt on your property, or if you accidentally damage someone else’s property, general liability is there to help.
Imagine that a delivery person twists their ankle on your front step or a toddler suffers a burn from spilled coffee. Scenarios like this can happen at any time. Medical bills for these incidents can be surprisingly high. Settlements for slip-and-fall accidents can easily reach tens of thousands of dollars.
Small business insurance for childcare providers typically starts with general liability coverage because it addresses the most frequent types of accidents. It handles the medical costs and, crucially, the legal defense fees if you get sued.
Workers’ Compensation insurance
Your staff is your greatest asset, but they also face risks. Lifting children, moving heavy tables, and being on their feet all day can lead to injuries. Back strain is incredibly common in this industry.
If you have employees, you likely need this coverage. Most states require workers' compensation insurance for businesses with employees, and penalties for non-compliance can be severe.
This insurance pays for an injured employee's medical treatment and a portion of their lost wages while they recover. It prevents you from having to pay those medical bills out of pocket and generally protects you from lawsuits filed by injured employees.
Commercial Property insurance
You’ve likely invested a lot in your space. Whether it is a dedicated commercial building or a modified section of your house, you have cribs, toys, books, electronics, and furniture that are essential to your daily routine. Commercial property insurance protects these physical assets from perils like fire, theft, vandalism, and wind damage.
Water damage is a leading cause of commercial real estate claims. If a pipe bursts overnight and floods your playroom, the cost to replace furnishings or cover repairs falls on you unless you have property insurance.
Many daycare providers choose to have a business owners policy (BOP), which conveniently bundles general liability and commercial property coverage into a single policy. It’s a cost-effective way to maintain financial protection, and the policy can include business interruption coverage to replace lost income if repairs force you to close temporarily.
Cyber insurance
You might not think of your daycare as a tech company, but you likely store sensitive data. You have parents' names, addresses, phone numbers, and often bank account or credit card information for billing.
If a hacker breaches your system or steals your laptop, the data on it is compromised. Cyber insurance helps pay for the fallout, including notifying parents, paying for credit monitoring, and covering legal fees.
Budgeting for home daycare insurance premiums
One of the first questions daycare providers ask is, "How much will home childcare insurance cost?" It varies. Your location, the number of kids you watch, your claims history, and the coverage limits you choose all play a role in how much you pay for what is sometimes called commercial nursery insurance.
However, viewing this as an unwanted expense is the wrong approach. Childcare business insurance is an investment in your venture’s longevity.
Getting daycare insurance is easy.
Securing daycare business protection doesn't have to be an ordeal. You can streamline the process by getting your ducks in a row before you start looking for quotes.
- Know your numbers. Have your business address, number of employees, projected revenue, and license capacity ready to go.
- Understand your state rules. Licensing requirements vary by state, so make sure you know the minimum liability limits you are legally required to carry.
- Assess your specific risks. Look around your space. Do you have a swimming pool? Do you have a trampoline? These specific hazards might require special conversations with your insurer.
- Shop specifically for business coverage. Look for carriers that understand small businesses. Direct providers can often offer better rates because they don't have the overhead of traditional agency models. (That’s true for biBerk.)
- Ask about exclusions. Always ask what the policy does not cover. For example, in this industry, it’s important to understand if abuse/molestation claims are addressed. It is better to know about exclusions now than when you are trying to file a claim.
Finding the right daycare insurance partner
If you have questions about daycare insurance from biBerk, our licensed insurance experts are happy to answer them. We want you to have the financial protection your business needs, so you can stay focused on the needs of the little ones in your care.