Child care centers and daycare businesses face unique risks involving children, employees, property, transportation, and daily operations. The right insurance can help protect your business when the unexpected happens.
Insurance Designed for the Risks of Child Care
Child care centers and daycare businesses face exposures that go beyond those of many other businesses. In addition to protecting your building, furniture, playground equipment, supplies, and other business property, you may need liability protection for accidents, injuries, professional services, employees, transportation, and other risks associated with caring for children.
Every child care operation is different. Your insurance needs can depend on factors such as the ages and number of children in your care, number of employees, facility size, transportation services, outdoor play areas, and the activities your center provides.
What Insurance Coverages Should a Florida Child Care Center Consider?
Child care insurance is typically built from several types of coverage rather than a single policy that protects against every risk. The appropriate combination depends on your facility, services, employees, property, and how your business operates.
Depending on your needs and the insurance carrier, coverage options may include:
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General Liability Insurance — for certain claims involving bodily injury, property damage to others, and other covered liability exposures
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Commercial Property Insurance — for your building, furniture, equipment, supplies, and other covered business property
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Abuse and Molestation Liability Coverage — for certain allegations involving abuse or misconduct, subject to policy terms and exclusions
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Professional Liability Insurance — for certain claims involving negligence or errors in the professional care or services your business provides
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Child Accident Medical Coverage — which may help pay certain medical expenses when a child is accidentally injured, subject to policy terms and limits
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Workers’ Compensation Insurance — for employee work-related injuries and illnesses, when required by Florida law or otherwise appropriate for your business
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Commercial Auto Insurance — for vehicles owned by the business and used to transport children or conduct business
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Hired and Non-Owned Auto Liability — for certain business use of rented vehicles or employee-owned vehicles
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Employment Practices Liability Insurance — for certain employment-related claims
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Cyber Liability Insurance — for risks involving sensitive records, personal information, and certain cyber incidents
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General Liability
Risk Factor
Visitors walking into the center could slip and fall, a teacher or employee could cause damage to a student’s property, or a lawsuit could be filed against your child care center.
Solution
General liability insurance is a necessity for any business. It provides broad coverage when you are deemed liable and will pay to defend lawsuits alleging injuries or property damage which occurred as the result of your center’s operations.
Business Personal Property
Risk Factor
Fire, weather, burst pipes, and other losses are frequent for child care centers given the large amount of physical space required to operate. These losses can cause significant damage to the school’s business personal property.
Solution
Business personal property coverage allows the center to replace property that has been damaged or destroyed by a covered cause of a loss. For a child care center, this may include property like chairs, tables, books, toys, materials, and supplies.
Workers’ Compensation
Risk Factor
If one of your employees receives an injury or becomes ill due to a work-related occurrence, you are required by law to have the proper coverage in place.
Solution
State disability and workers' compensation protects your employees should a job-related injury or sickness occur during their course of employment. This coverage is required by law, so be sure you have it.
Cyber Liability
Risk Factor
The internet has spun a whole new web of liability exposures. E-commerce, social networking, cloud storage, and other technologies bring great benefits to all businesses. But with these benefits also come challenges, including protection of privacy, data, and financial information of your employees and students.
Solution
Cyber liability coverage covers unauthorized access to electronic data or software within your network. It also provides coverage for spreading a virus, computer theft, extortion, or any unintentional act, mistake, error, or omission made by an employee. This coverage is quickly becoming more and more important as you embrace technology to help run your child care center.
Umbrella / Excess Liability
Risk Factor
What happens when your child care center faces a large liability loss that exceeds the basic limit of your standard policy?
Solution
A commercial umbrella policy provides high limits of insurance, typically between $2,000,000 and $10,000,000. Coverage is extended over your general liability insurance, workers' compensation, business auto, and directors and officer’s liability coverage. It provides a great safety net and helps ensure your school is well protected.
Professional Liability
Risk Factor
All child care centers and schools are at risk for professional liability claims to be brought against them for negligence.
Solution
Professional liability protects your teachers and child care employees. If your staff is sued due to negligence in relation to a child’s safety or for making an error in judgement, your center can also be sued.
Abuse / Molestation
Risk Factor
When working with children or youth, there is always a risk that staff/owners could be accused of physical, sexual, or mental abuse.
Solution
If an employee or owner is accused of abuse, you need abuse/molestation coverage to protect your center or school from the possibility of significant financial loss. Even unfounded lawsuits are costly to defend.
Commercial Auto
Risk Factor
Commercial auto is necessary if your center has company-owned vehicles and children are transported to and from school and/or field trips.
Solution
Commercial auto insurance can protect your center or school if an accident occurs or there is damage to a vehicle.
Hired and Non-Owned Auto Liability
Risk Factor
If you or your staff drive their own vehicle on business time or you rent vehicles in the business name to travel to meetings, conferences, or elsewhere, you face additional exposure and risk.
Solution
Hired and non-owned auto liability protects your staff if they are driving their own vehicle to run errands. Your center or school can be held liable for injuries or property damage if a driver is involved in an accident. The hired liability portion covers rented vehicles when listed in the business name for travel use.
Employment Practices Liability Insurance (EPLI)
Risk Factor
Employment-related claims can be made by past or current employees, those who have applied for work, and even clients or potential clients.
Solution
Employment practices liability insurance can help protect your child care center from claims which may arise due to alleged negligence relating to discrimination, sexual harassment, wrongful termination, service refusal, or any other employee-related claim.
Employee Benefits Liability Insurance
Risk Factor
It’s possible that your child care center could incur losses if you offer employee benefits to your team.
Solution
The administration of benefit plans can be tricky. Employee benefits liability insurance help cover any losses resulting from many types of employee benefits plans such as health insurance, retirement plans, and more.
Student Accident
Risk Factor
Everyone knows that children can be accident-prone. Often they trip and fall, collide with one another, or even knock out a tooth or break a bone, so it is important to obtain a student accident policy.
Solution
A student accident policy can cover children’s medical bills if they are injured at the center or on a sponsored field trip or activity. There are two options. Full excess reimburses secondary to the child’s health insurance plan and primary reimburses on a primary basis, regardless of the child’s current health insurance plan.
Child Care Centers Have Specialized Insurance Risks
Child care centers often have property and liability exposures that require special attention. Playground equipment, classroom furnishings, toys, computers, kitchen equipment, and other business property may all need to be considered when building an insurance program.
Transportation creates another important exposure. If your center transports children, the vehicles and drivers should be reviewed carefully to determine the appropriate commercial auto coverage. Florida child care rules also include specific insurance and safety requirements for vehicles used to transport children.
Because child care businesses are responsible for the supervision and safety of minors, abuse and molestation liability coverage should also be carefully evaluated. Coverage, exclusions, reporting requirements, and eligibility can vary significantly by insurer.
Protect the Business Behind Your Child Care Center
A child care center is both a place families trust with their children and a business with employees, property, income, records, contracts, and ongoing expenses. That means your insurance program should address both child care-specific risks and the everyday exposures that come with running a business.
Depending on your operation, you may also want to consider workers’ compensation, employment practices liability, crime or employee dishonesty coverage, cyber liability, equipment breakdown, and business income coverage.
First Florida Agency helps child care centers and daycare businesses in Nocatee, Ponte Vedra, St. Johns County, Jacksonville, and throughout Northeast Florida evaluate insurance options based on their individual operations and risks.
Need insurance for your child care center or daycare business? Request a quote or contact First Florida Agency at 904-822-8800 to review your coverage options.
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