Some people who want to make a difference in the lives of children consider starting an in-home daycare business. The ability to provide hands-on care for little ones can be very rewarding.
However, there are a lot of risks associated with supervising children in your own home. There are the usual risks to injury and illness that go along with being in a home, as well as the fact that you’ll be supervising multiple children at one time who are not your own.
In addition, if you hire employees to help you run your in-home daycare business, you will be taking on some risk associated with potential mistakes they may make that could result in injury or illness to the kids who attend your daycare.
If you don’t have the proper business insurance, these incidents can turn into monumental disasters for your business. All businesses need certain liability insurance policies to protect them, but there are other liability insurance coverages that are suggested for in-home daycare businesses.
Here are the liability insurance policies owners of in-home daycares should consider.
General Liability
General liability is the type of insurance that just about every business will have. That’s because it’s a policy that covers a wide range of risks.
In terms of an in-home daycare, this policy would cover your business against any claims of negligence, helping you to pay for any judgments and legal costs that come from the claims. General liability insurance will include coverage for damage done to property, people suffering injuries or illnesses, or any other personal injury.
This type of coverage includes payments for medical expenses, should anyone be injured while visiting your home for a business purpose.
Business Personal Property
Your general homeowners insurance policy will cover most damage that occurs to your home itself, but it usually will not include sufficient coverage to any business equipment you may need. That’s why in-home daycares might consider purchasing additional business personal property coverage.
If your business buys any extra furniture, equipment, toys and/or major supplies, you might want to consider this type of insurance coverage. Another option would be to get an endorsement on your homeowners insurance policy, but even that might not be sufficient.
Business Interruption
If your business needs to stop operating for a period of time, you will likely suffer damages as a result of an interruption of your income. For instance, if your home suffers damage from a falling tree or a fire, you may need to close the in-home daycare until your home can be properly repaired.
This can cause a double whammy for business owners, as they have to go through repairs on their own home at a time when their income is impacted. Business interruption policies would provide you with money that could help you pay for your mortgage and other business-related costs such as salaries.
Business Owner’s
It’s possible to get all three of the above insurance policies wrapped into one bigger policy called business owner’s insurance. While this certainly would simplify the process of obtaining insurance, it may also include coverages that aren’t necessary.
For example, it’s possible that a BOP could have extra coverages for a structure that’s already sufficiently covered under your homeowner’s policy. In this case, you would be paying for coverage you don’t really need.
Before you consider this coverage, then, it’s important to speak with your insurance agent to find out whether it would be good for you.
Professional Liability
You will be using your professional expertise as you run your in-home daycare business. That’s why parents will be entrusting their children to your care.
While this is certainly a good thing, it also creates the potential for lawsuits that could be related to professional negligence. It’s possible, for example, that parents could file a lawsuit against you if their child isn’t making progress in an educational enrichment specialty if your business states that it offers that.
Just like general liability insurance, professional liability policies would provide coverage for legal fees and any judgments that are brought against you.
Workers’ Compensation
If you have employees, then you should consider purchasing workers’ compensation insurance. Many states will require any business with a certain number of employees to carry this type of coverage.
This policy will provide your employees with payments for any lost wages and/or medical bills should they suffer from an injury or illness while on the job. This could happen in their normal day-to-day work-related activities, whether it directly involves a child or not.
Corporal Punishment
One type of insurance coverage that is specific to in-home daycares is corporate punishment insurance. This policy would help you pay for any lawsuits that arise if your business is sued because a parent accuses you or one of your employees of causing physical harm to their child as part of reprimanding them.
Abuse and Molestation
Like corporal punishment, physical, mental and sexual abuse are typically not covered under general liability policies. That’s why you might consider abuse and molestation coverage, which some companies offer as an endorsement on other policies.
This would provide similar coverage to corporal punishment insurance in case your business is sued because you or an employee is accused of physically or mentally abusing a child in any way.
Each insurance company’s policy works a little different, so make sure to check with your insurance carrier to ensure you are getting all the coverage you need.
Work with an Insurance Company You Can Trust
Running an in-home daycare business can be a very challenging job. There are also many risks that owners take on by starting and running this type of business.
As such, it’s very important that you have sufficient insurance coverage that can protect you in case anything goes wrong. If you don’t work with an insurance company that you can trust, though, you might not be getting all the insurance coverage you need.
In Michigan, Signature Insurance provides in-home daycare businesses with all the insurance policies they need to run their business worry-free. Our team of experts will help you walk through all of your insurance options to ensure you not only get all the coverage you need, but that you get it at the best price.
Contact us today to find out more.