Homeowner Liability Insurance Will Not Protect You
Do you have business liability insurance? Do you know why you need business liability insurance? Because if a child gets hurt, while in your care, you may get sued by the parents if they have an issue with the actions you took. I read an article this morning about child care providers and the type of risks your business has. This article was about liability insurance and what can happen when a child is injured.
The child care provider did not have professional liability insurance.
They thought their homeowner insurance would protect them.
The provider (in the article) had to hire an attorney. They didn’t realize that all of their personal assets (such as their house or any property) was at risk. “This provider, like most providers, does not have much in the way of personal assets. But, when the parent wins in court, they can put a lien on her house and garnish her wages if she decides to take another job in the future. It’s a financial cloud that is likely to hang over her for the rest of her life.”
Visit our RESOURCES section for valuable information on types of insurance, what kind of policies & procedures you should have in place, medical safety checklists and permission-based forms every child care provider should have.
Different types of insurance are required for different types of child care businesses. According to ChildCareAware, requirements vary by state. It is important to consider all insurance options, even if they are not required by your state. Your business is a big investment, both personally and financially. You should protect that investment and yourself by understanding the insurance available to you and deciding what to purchase. Legal advice may be helpful to you in making your decision.
Types of insurance
Business Owners Insurance, which includes general liability and property insurance, is a more economical way of buying General Liability and Property Insurance than buying it separately.
- General Liability Insurance covers bodily injury or property damage that occurs during the course of or because of your business. If a child trips on the stairs and is injured, for example, the parents may sue you.
- Professional Liability Insurance is separate and insures you and others you may employ while conducting your business.
- Property Insurance covers all of your business equipment inside and outside of your program.
Professional Liability Insurance insures you and others you employ for loss arising out of your responsibility or negligence while performing your business. It is important to closely review the differences in cost between liability limits; there is usually minimal cost difference for higher liability coverage. While sexual abuse and molestation coverage is usually included in your Professional Liability policy, you should verify this with your insurer.
- Sexual abuse or physical abuse coverage insures you for loss if one of your employees or others with access to children in your program abuses a child in your care.
Workers Compensation Insurance is required in many states for all employees and, in some states, for the business owner and employees as well, depending upon the type of business. This insurance pays benefits when an employee is injured while working. This insurance is governed by the state in which you reside.
Consult your insurance agent for more information.
How to purchase insurance
Consult an insurance agent who understands the child care business. If you need more information on how to purchase insurance for your business and/or you do not have an insurance agent, contact your State Insurance Commissions office (see National Association of Insurance Commissioners).