When you open your child care center, many of the rules and regulations you will be under are enforced by the state in which you live. Insurance requirements are one such regulation that varies from state to state. However, you should invest in insurance in order to protect yourself, your daycare business, your clients and your employees. It is wise for child care centers to invest in liability, structural, accident, health and workers’ compensation insurance.
Liability Insurance: Liability insurance will protect you in the event you are sued for damages. These damages could include child injuries, pet injuries, accidents, personal injury (libel, slander), damage to your own property, and damage to the property of others. The amount of coverage depends on the particular policy you select. There are other types of liability insurance to consider such as sexual abuse and liability insurance, child abduction liability, special events liability (fieldtrips, fundraisers, etc.) and corporal punishment. Daycare liability can be stand alone or an endorsement on your homeowner’s insurance.
Accident Medical Insurance: Accident medical insurance is insurance that pays children’s medical bills if they are injured at your facility or during activities you sponsor and the child has no insurance coverage of their own, or their bills exceeds their current medical insurance coverage. Markel Insurance Company contends, “You can think of Accident Medical insurance as a goodwill gesture—by paying a child’s medical bills now, you may be able to avoid a lawsuit later”.
Health Insurance: You may want to provide health insurance for your employees. Many of the basic health insurance plans for employees are those in which your employees directly reimbursed a fixed amount for the services they use most frequently like doctor’s office visits, urgent care, diagnostic tests, hospitalization, and emergency room treatment.
Worker’s Compensation: Many states require that you purchase worker’s compensation insurance if your daycare center has employees. If you do not have worker’s compensation insurance you may be punished with fines or imprisonment. The good news is that workers compensation premiums are tax deductible as a business expense.
Daycare Business Insurance Resources:
Daycare Insurance Agency Websites
Daycare Insurance Guides
Family Child Care Legal and Insurance Guide: How to Reduce the Risks of Running Your Business by Tom Copeland, JD and Mari Miller [Redleaf, 2004]. This guide is specifically for child care providers to help them with insurance planning and strategies to reduce their daycare business’ risks.
The Business of Childcare: Management of Financial Strategies by Gail H Jack [Delmar Cenage Learning, 2004]. This guide covers a wide variety of financial strategies including how to comparison shop for different types of daycare business insurance.
Consult with the local licensing, regulations, and laws by state to find the insurance requirements for childcare centers.
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