Childcare services comprise an industry that requires attention to detail with regards to insurance. The inherent nature of children as potential victim and/or potential source of chaos can be stressful when considering how to protect the business owner. Within a brief conversation, our agency can discuss your operations and review exposures at your daycare.
Daycare centers may be required to have certain coverage lines such as General Liability by their landlord and/or Workers Comp by the state, but exposures are not limited to required coverage. It is important to converse about your business with an independent agent to ensure that you are covered properly, however, you may want to start your own review immediately. Below are some coverages that a daycare owner should have in their policies.
Key Coverages for Daycares in 2024:
Our legal climate is growing ever more “anti-business.” Insurance companies have strong legal teams and can choose to defend their clients. We review plenty of Daycares, and some of the insurance policies are lacking in key areas.
- Abuse/Molestation/Kidnap
- Increased Medical Payments
- Employment Practices Liability – Discrimination Coverage (EPLI)
- Umbrella Policy
Abuse, Molestation, Kidnapping – Daycares and Preschools
For our clients that operate with children, we will review coverage for Sexual Abuse and Molestation. This is an optional coverage that protects the entity in the event a suit is filed against the business. Defense and coverage can be applied whether employee was negligent in fact or simply named in a suit.
Increasing Med Pay Limits – Daycares and Preschools
Another coverage we will look at is the Medical Payment limit in the General Liability section. Standard Med Pay is $5,000, but many Carriers will make this $10,000 or $20,000 for no additional charge to premium. This is ideal for any cosmetic surgeries for kids who may trip and fall face first into an edge or corner.
Employment Practices Liability – Daycares and Preschools
EPLI or Employment Practices Liability is becoming more common place, but we often see businesses go without. If your business serves the public, EPLI should be standard in your mind. Whether negligent in fact or simply accused of discrimination, your business may face a lawsuit. In the aspect of children, parents may act off the reality spoken by the child thus creating a “loose trigger”. Example: your daycare was at capacity and you denied the admittance of a minority child. Parents file suit for discrimination.
Full impact of an Umbrella – Daycares and Preschools
The umbrella is particularly useful for businesses at risk of a large loss. With mental anguish being a factor in legal penalties, children can bring large settlements to the court room. The umbrella policy extends the limits of the underlying coverage. It can also influence an insurance company to defend their client rather than simply pay the loss, because they have more money at stake. This can in turn be additional protection for your brand as a Daycare.
For an example, take a lawsuit filed on behalf of a child’s parents. This deviant child was paralyzed after running out into the road. Parents claim supervision and physical barriers were inadequate and seek damages for the impact of the paralysis on his remaining life AND its impact on THEIR life via mental anguish. Plus of course the medical bills. The insurance company would likely defend using video camera evidence to show the attempted stopping of the child as he/she climbed and disobeyed beyond reason, saving the daycare’s operations and reputation.
Summary of Insurance Coverages for Daycares and Preschools
- General Liability
- Medical Payments
- Damage to Premise Rented
- Abuse, Molestation, Kidnapping Coverage
- Employment Practices Liability (Discrimination)
- Business Personal Property and Equipment
- Workers Compensation
- Business Auto – [Hired & Non-Owned]
- Cyber Coverage
- Umbrella Policy
- Business Income Expense
- Refrigerated Food Spoilage Coverage
- Freezer/Refrigeration Equipment Coverage
- Management Liability
- Etc.
Wes Connor Insurance is an independent agency appointed by a variety of companies that specifically target daycares and preschools. It would be our pleasure to have a conversation about your risk and offer a comprehensive review. Our “sales” process is merely educational, comparative, and transparent. The choice is of coverage is always yours, we want our community to understand what they have to the best of their ability.
