Since the spread of COVID-19, many parents around the country have had to find ways to stick to their work schedules while simultaneously keeping their children attentive and engaged. For many, daycare centers offer parents support, keeping their kids busy and active while they go to work. But with a second wave of the coronavirus working its way through the U.S. this summer, parents are taking more precautions while dropping their kids off at daycare centers, which have presented risks for exposing children to the virus. In turn, these facilities need to evaluate their daycare insurance package.
Daycare centers and other child care providers need insurance to protect themselves from third-party claims and different types of losses, including damage to personal property and potential risks related to COVID-19. And while understanding how the virus is affecting the insurance industry is still murky, especially for claims against daycare centers, having daycare insurance can limit risks and losses in general.
Those who operate a childcare center should be made aware of the benefits of obtaining Daycare insurance, including how it protects them from various liabilities that exist in their daily operations.
Here’s a closer look at daycare insurance and how it can protect clients.
Licensing and Insurance
Child care providers and daycare centers are regulated by their state. The laws vary widely, and different rules may apply to different kinds of providers. For example, some states have a separate requirement for child care centers and child care home providers, like in California. While there are a few exceptions that apply, the law usually requires both types of providers to secure a license and requires family care providers to purchase liability coverage.
All daycare centers should purchase a basic liability insurance plan, even if their state doesn’t necessarily require it. This is an essential piece of coverage for providers.
Daycare Center Risks
Child care businesses face several risks that can lead to lengthy and costly lawsuits. Some examples include:
- Slips and falls
- Faulty toys or equipment
- Tainted food
- Ingestion of toxic substances
- Negligent acts by staff members
- Hitting, biting, and more by other children
- Alleged abuse or molestation
- Failure to provide the level of service parents expect
There are several types of liability insurance a daycare center may need, including general liability, professional liability, and auto liability coverage. These coverages may be provided on a separate basis or combined into a business owner’s policy.
Business owners who operate out of their home should not rely on their homeowner policy to cover a daycare center operation without checking with their insurer. This is vital because most homeowners’ policies contain business-related exclusions. While some insurance providers will cover a home-based childcare business under their homeowner policy, the coverage must be endorsed before such coverage will apply.
Daycare centers may be sued if children in their care or visitors to the center are injured. Claims resulting from most of the risks noted above are covered by general liability coverage. This insurance coverage applies to claims against the company or its employees for damages incurred by bodily injury or property damage.
Physical Abuse or Molestation
Abuse and molestation endorsement can vary widely. Some insurers cover sexual abuse and molestation but not other types of abuse, such as hitting. Some insurers do not provide coverage for the alleged perpetrator, even if the allegations turn out to be unfounded. When daycare centers are shopping around for coverage, they should choose an endorsement that affords defense coverage for the perpetrator until allegations are deemed factual.
Errors and Omissions Liability
Daycare centers may be sued for injuries they allegedly caused by failing to provide the level of care the person suing them expected. For example, if a daycare center says it will teach their kids the alphabet within a certain period and someone’s child hasn’t learned during this time, they may bring a lawsuit against the daycare center. This is where errors and omissions coverage can protect the daycare center.
A commercial umbrella policy affords additional coverage when the limits on the primary liability policy have been exhausted in defense of claims. Daycare centers should consider this piece of coverage since allegations stemming from injuries can be costly.
About Provident Insurance Programs
With roots dating back to 1902, Provident Insurance Programs is a program administrator that serves paid and volunteer firefighters in addition to emergency medical responders with numerous custom-tailored insurance programs. We’ve also extended our expertise and experience to offer benefit plans and coverages to participant groups as well as Transportation Benefits. We are committed to continuing to provide superior customer service, and would be happy to speak with you to provide further information. Give us a call today at (855) 201-8880 to speak with one of our representatives.