Opening a daycare school is a significant responsibility that requires proper insurance protection. The right insurance coverage not only helps meet licensing requirements but also protects your business, staff, and the children in your care from potential financial disasters. Here's a straightforward breakdown of the essential insurance policies needed to open and operate a daycare school safely and legally.
Essential Insurance Policies for Daycare Schools
General Liability Insurance
This fundamental coverage protects your daycare from third-party claims for bodily injury, property damage, and personal injury. It covers incidents such as:
- A child getting injured on your playground equipment
- A parent slipping and falling on your premises
- Reputational harm claims
Most states require minimum liability coverage as part of daycare licensing requirements, typically starting at $1 million per occurrence.
Professional Liability Insurance
Also known as errors and omissions insurance, this coverage protects against claims of negligence or inadequate care. This includes allegations of:
- Improper supervision
- Failure to follow safety protocols
- Mistakes in administering medications
- Failure to prevent bullying or harmful behaviors
Property Insurance
Whether you own or lease your daycare facility, property insurance protects your building, equipment, toys, furniture, and other physical assets from:
- Fire damage
- Storm damage
- Theft and vandalism
- Water damage (with limitations)
For home-based daycares, standard homeowner's policies typically exclude business activities, making commercial property coverage necessary.
Workers' Compensation Insurance
If you have employees, workers' compensation is legally required in most states. This coverage:
- Pays medical expenses for work-related injuries
- Provides disability benefits for injured employees
- Protects your business from employee lawsuits related to workplace injuries
Common daycare employee injuries include back strains from lifting children, slip and falls, and repetitive stress injuries.
Professional Conduct Coverage
This specialized coverage is crucial for childcare businesses, protecting against claims of inappropriate conduct or allegations of misconduct. Many standard liability policies exclude these types of claims, making this separate coverage essential for comprehensive protection.
Commercial Auto Insurance
If your daycare transports children, commercial auto insurance is vital. This covers:
- Vehicles owned by your daycare
- Hired and non-owned vehicles used for daycare operations
- Liability for accidents during transportation
- Medical payments for injured passengers
How EJC Insurance & Financial Can Help
At EJC Insurance & Financial, we specialize in creating comprehensive insurance packages for daycare schools. We understand the unique risks faced by childcare providers and can tailor coverage to your specific operation—whether you're opening a small home-based daycare or a large commercial facility.
Our team works with multiple insurance carriers to find competitive rates while ensuring you meet all licensing requirements and have adequate protection against the most common risks faced by daycare operators.
FAQ’s
1. Is insurance required to get a daycare license?
Most states require proof of general liability insurance as part of the licensing process for daycare facilities. Specific requirements vary by state, but minimum coverage limits (typically $1 million per occurrence) are commonly required. Verify your state's specific requirements before applying for your daycare license.
2. How much does daycare insurance typically cost?
Insurance costs for daycare facilities vary based on factors including location, number of children, services offered, and claims history. Small home-based daycares generally have lower premiums than larger commercial facilities. Working with an independent agent like EJC allows you to compare options from multiple carriers to find the best value for your specific situation.
3. Does my homeowner's insurance cover my home-based daycare?
Standard homeowner's policies typically exclude business activities, including home-based daycares. While some insurers offer limited endorsements for very small in-home daycares, most require separate commercial insurance coverage. Operating without proper coverage risks claim denials and potential policy cancellation.
4. Do I need commercial auto insurance if I occasionally transport children?
Yes, if you transport children as part of your daycare services, even occasionally, you need commercial auto insurance. Personal auto policies generally exclude business use, especially when transporting clients or customers. Commercial auto coverage protects against liability for accidents during transportation and provides medical payments for injured passengers.
5. What happens if I operate a daycare without proper insurance?
Operating without appropriate insurance creates multiple risks: you may be operating illegally without meeting licensing requirements; you become personally liable for any accidents, injuries, or property damage; and you could face significant out-of-pocket costs for medical expenses or legal defense. Additionally, parents may pursue personal assets if their child is injured in an uninsured facility.
