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Daycare Insurance, Photo by Alan Cleaver

As you learn about daycare business regulations and licensing for in-home family daycare businesses, you will learn that you must invest in insurance in order to protect the business, the clients, and the employees. It is wise for child care centers to invest in liability, accident, structural, and health insurance as well as workers’ compensation insurance.

Types of Daycare Insurance

Liability Insurance protects you in the event you are sued for damages. 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. Health insurance for employees directly reimburses them a fixed amount for the services they use most frequently. In addition, many states require that you purchase worker’s compensation insurance if your daycare center has employees.

Your current home owner’s insurance policy may not be sufficient. Check to see if your home owners policy includes business pursuits, sex abuse claims, or limits liabilities to a very short distance from the home. If so, you will definitely need daycare insurance.

In many states, to be eligible for coverage your daycare business must be licensed and the license must be in good standing.  In many cases, there is a maximum number  of children that you can care for in order to be eligible for the daycare insurance. The insurance certificate is usually issues within one week after the application is received.

Online Daycare Insurance Resources

There are many companies online that will insure your daycare business. Feel free to shop around to find an insurance company that best meets your business’ needs. Here are a few:

Daycare Insurance Services
Morgan & Associates
Child Care Insurance Specialists
Markel Insurance Company
American Federation of Daily Care Services
The Maskin Group

Daycare Insurance Books
Guides to starting a daycare describe the insurance you need and how  to select the daycare insurance that is right for you:

Family Child Care Legal and Insurance Guide: How to Reduce the Risks of Running Your Business by Tom Copeland, JD and Mari Millard [Redleaf, 2004].
The Business of Childcare: Management of Financial Strategies by Gail H Jack [Delmar Cenage Learning, 2004].
Start and Run a Home Daycare by Catherine M. Pruissen [Self Counsel Press, 2002]
Home Daycare Record Keeping: Your Financial Guide to Success by Brigitte A. Thompson [Datamaster Publishing, 2003]
The Business of Home Daycare by P.A.Williams  [1^st Books Library, 2002]

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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

Day Care Insurance Services, Inc.

Morgan & Associates, Inc.

Nationwide Mutual Insurance

Castle Rock Agency, Inc.

Markel Insurance Company

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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