Anyone operating daycare centers from out of their home will need to have the proper insurance in place to protect themselves and those in their care in case of an unexpected incident. Home daycare insurance is a special liability insurance designed to financially protect daycare owners operating out of their homes, should an accident occur. Children are particularly prone to accidents and standard homeowners insurance policies do not provide sufficient protection for home daycare providers, so it is vital for home daycare operators to secure the right insurance policy.
What is daycare insurance?
Home daycare insurance is typically offered as an optional add-on coverage to your homeowners insurance policy. This add-on coverage extends your liability protection to cover the children in your care, in the event of accident or injury. Additionally, this coverage will usually extend property damage coverage for the areas in which your daycare operates.
There are certain criteria that daycare operators must meet in order to qualify for home daycare insurance coverage. Eligibility is usually determined by the size of your business, as well as the number of children that are in your care at any given moment. Each insurance carrier sets their own maximum for the number of children permitted to be in your care, typically falling between three and six children. If your home daycare center welcomes more children, you may need to seek out a commercial insurance policy instead.
What does home daycare insurance cover?
Home daycare insurance varies in some ways from provider to provider. However, there are certain aspects that remain largely the same in terms of what is covered. In general, home daycare insurance expands your personal liability coverage to protect against financial liability in the event an accident takes place. Additionally, you may have medical payments to others included as part of your daycare insurance plan. This will cover the medical costs associated with any injuries suffered by the children in your care.
Most home daycare insurance policies also extend personal property liability related to the areas in which the business operates. Things like playground equipment, educational materials or furniture would typically be covered under this extension.
It is important to understand that while many of the coverages offered through home daycare insurance policies may be similar to a homeowners insurance policy, your standard homeowners policy will not typically cover any costly accidents that occur as the result of a business operating on your property.
Homeowners insurance policies usually only offer up to $2,500 for home business property protection and does not include protection for personal liability. If a child is harmed in your care and you do not have a home daycare insurance policy, you will be financially responsible for any legal fees and medical expenses.
In-home childcare insurance coverages
The coverage limits provided below are examples, but specific limits may vary by insurer and state.
|Coverage||What it covers||Average limits|
|General liability||This insurance covers bodily injury and property damage that occurs during business operations.||$1 million per occurrence/$3 million aggregate|
|Abuse and molestation||This covers defense or monetary judgement against your business in the event you or your employees are found guilty of abuse or molestation.||$100,000 per occurrence/$300,000 aggregate|
|Accidental medical||This covers a child’s medical expenses if they are injured in your care or if the bill exceeds the parent’s health insurance limits (depending on whether or not the policy reflects standard or excess accidental medical coverage limits).||$10,000 for sudden and accidental injuries/$25,000 for accidental death and dismemberment|
|Umbrella liability||This covers excess liability that goes above the limits of your personal liability policy to help cover the cost of legal fees, property damage, and bodily injury.||$300,000 personal liability|
Who needs home daycare insurance?
Business owners operating out of their homes in the childcare industry will almost always require insurance to remain operational. A home daycare insurance policy may be right for you if your business falls under one of the following categories:
- Religious or nonprofit daycare center
- Before- and after-school program
- Summer day camp
- Preschool program
The exact type of insurance you need will ultimately depend on your state’s regulations regarding the number of children in your care and the size of your business. In some cases, you may also be required to hold a business license and commercial insurance policy. To find out the insurance requirements for home daycare centers in your state, visit the United States Department of Health and Human Services website.
Where to buy in-home daycare insurance
Home daycare insurance policies are unique products that may not always be available through standard homeowners insurance providers. For this reason, business owners may need to seek out coverage from alternate carriers to satisfy their insurance needs. The following insurance companies are just some that provide in-home daycare insurance policies:
If you are considering starting a home daycare business, you may also consider switching homeowners insurance providers so you can bundle and save on coverage. Many carriers offer customers the opportunity to save by demonstrating loyalty and purchasing additional policies.
Frequently asked questions
Does homeowners insurance cover home daycare businesses?
Most homeowners insurance policies only offer $2,500 worth of coverage for business-related property damage. If a child is injured under your care and you do not have a home daycare insurance policy in place, your homeowners insurance policy will likely not foot the bill for any related expenses incurred as a result of the accident.
How much does at-home daycare insurance cost?
The exact cost of your at-home daycare insurance policy will vary depending on which carrier you select and your geographic location but will typically be factored as an add-on home insurance cost. At Next Insurance, for example, customers can expect to pay as little as $33/month for daycare insurance depending on where they live. Home daycare insurance policies may not be available in your state, so be sure to research and compare quotes from potential insurers before making the decision to switch.
What is errors and omissions insurance for in-home daycare?
Errors and omissions coverage (also referred to as professional liability insurance) covers expenses if childcare providers are sued for mistakes or oversights. For instance, if your staff did not provide adequate supervision and a child became injured as a result, errors and omissions insurance will cover any expenses that are incurred as a result of a lawsuit filed for the mistake.