Insurance for Your Home-Based Childcare Business
You've properly registered, licensed or certified your home childcare business according to the requirements of the state and are ready to get to work. Before allowing a child to walk (or crawl) into your home, consider a few essentials for your business liability insurance.
Liability Coverage
The law in some states may not require insurance for a home childcare business, in Minnesota the DHHS requires liability coverage for day care centers and in-home care providers. Liability insurance covers claims of property damage and bodily injury for which your business is responsible. A single severe injury to a child could result in millions of dollars in damages, medical bills, rehab costs, pain and suffering or other expenses. And depending on how you've decided your business should legally operate- for example, as a sole proprietorship or a corporation, and so on- you may also become personally responsible, thus putting personal assets at risk, for any claims of liability against your business and resulting damages.
To determine how much business liability insurance is adequate for your business, you'll need to start with two questions:
1) How comprehensive do you want your coverage to be?
2)How high should your limits of liability be?
Both of these questions need to be discussed thoroughly with your insurance agent!
Medical Insurance
Business liability insurance is essential should your business be legally responsible for an injury to a child in your care. It may also be possible to secure a type of medical insurance-often called "medical payments" or "medical expense" insurance- designed to pay an injured person's medical bills regardless of fault. Some business liability policies offer a small amount of this coverage-such as $1000-automatically while others may include or allow for the purchase of a much higher limit.
A few Potential Gaps
While it's true that business liability insurance policies vary, there are some common characteristics-and that could pose problems for you. For example, if your home has a swimming pool, trampoline or you live on a lake, you may have more difficulty finding coverage for your home childcare business. In addition, if you have a dog, you may find that many insurance companies will decline to offer coverage depending on its breed.
It's also important to remember that the liability insurance policy for your home childcare business will likely not cover injuries to your own children and thus should not be viewed as an alternative to a family health insurance policy.
Certificate of Insurance (COI)
Furnishing a certificate of insurance to potential customers will help them feel more comfortable leaving their child in your care and it could create a competitive advantage for your business.
Simply put, it is far too risky to operate a business entrusted with the well-being of children without adequate liability insurance. For more information please contact us at First Lakes Insurance Agency, Your Trusted Choice Independent Insurance Agent. 218-862-4444
Thank you to our partners at Trusted Choice for much of the information in this blog article.