Insurance for Daycare Centers

Daycare operations are generally subject to state licensing, although some states exempt those serving a small number of children or those run by religious institutions. The license issued establishes the number and ages of children for whom can be cared. Important factors are the adult to child ratio, hours of operation and the number and ages of children served.

Recommended Insurance Programs for Childcare

Daycare services generally include at least one meal a day, snacks, activities, naps, indoor and outdoor play areas and various learning opportunities. Prescribed medication can be administered, but most daycare centers do not have staff nurses. In-home daycare providers are sometimes written and endorsed onto homeowners policies.

Coverages Recommended for Daycare Centers:

✓ General Liability Insurance
✓ Professional Liability Insurance
✓ Business Personal Property
✓ Hired and Non-Owned Auto
✓ Workers Compensation Insurance
✓ Business Income with Extra Expense
✓ Commercial Crime/Employee Dishonesty

Other coverages to consider for Daycare Providers:
Building, Forgery, Computer Fraud, Employment-Related Practices Liability as well as Abuse and Molestation Coverage (often included with Professional Liability).

Common Risks and Needs Associated with Daycare Facilities

Premises liability exposures are extremely high when young children are involved. The adult to child ratio should be low enough to permit adequate supervision. Evacuation drills should be conducted regularly. Procedures should be posted that address all emergencies, with instructors and aides trained in their use. References for all employees and volunteers should be verified, including criminal background checks. Access to the building must be limited during operating hours to keep children safe. The procedures in place for delivery and pickup or release of children to adults should be evaluated carefully.

Abuse and molestation exposures must be considered when supervision of children is involved. The abuser is never covered under the policy. While there is some coverage for the facility where the abuse takes place, it can be very limited depending on the policy. More comprehensive coverage should be purchased from specialized markets. The facility is responsible for taking all possible care to protect students from predatory adults and older students through background checks, monitoring, supervision and by reporting all allegations of abuse to the proper authorities. The more vulnerable the potential victim, the more vigilant the facility should be to protect them.

Property exposures include offices, kitchens, classrooms and outdoor play areas. Ignition sources include electrical wiring, stoves for cooking and heating and air conditioning equipment. All wiring should be up to code. Overriding circuit breakers and fuse boxes should not be allowed. The high volume of paper, craft supplies, toys and other items contribute to the spread of fire. Wood and/or plastic furnishings increase the fire load. Most equipment is susceptible to and easily damaged by fire. Food preparation is generally limited to stove-top or microwave cooking, but any cooking increases the fire loss potential.

Automobile exposures are a major concern and the potential for loss or injury is high if the facility transports children to and from off-premises activities. All drivers should have the appropriate license for the type of vehicle used to transport children. Car seats must be used as required by state law. Appropriate supervision should be provided when multiple children are transported. Motor Vehicle Reports (MVRs) on all drivers should be checked regularly. All vehicles must be properly maintained and maintenance records kept at a central location.

Crime exposures are primarily from employee dishonesty. Hazards increase without proper background checks. All job duties, such as ordering, billing and disbursing, should be separate and reconciled on a regular basis. Receipts should be issued for cash payments received from parents. Bank deposits should be made on a timely basis to limit the buildup of cash on the premises. Audits should be performed at least annually.

Workers compensation exposures from back injuries, lifting, hernias, sprains, strains, slips and falls can be high, along with exposure to communicable diseases. All employees should have up-to-date immunizations to prevent the spread of communicable diseases. Unauthorized visitors can pose a threat to employees as well as children.

Liability Quotes for Daycares

General Liability Shop.com offers affordable liability insurance quotes for daycares throughout the U.S. Our daycare programs include all lines of business insurance, as well as our Target programs for business owners policies (BOPs). Contact one of our business insurance Specialists today at 800-900-8657, or start a quote online now.

Daycare Liability Classification Codes

Commercial insurance companies use various liability classification systems in order to classify and rate coverage premiums for daycares. Here are the most common business insurance classifications for childcare facilities:

Business Liability Category: Service—Childcare

SIC Business Insurance Codes:

• 8351: Childcare Services

NAICS Liability Classifications:

• 624410: Child Daycare Services
• 624120: Day Services for Elderly

Business ISO General Liability:

• 41715: Daycare Centers (for profit)
• 41716: Daycare Centers (non-profit)
• 41716: Daycare—In Home

Common Workers Compensation Class Codes:

• 8869: Child Daycare Center—Professional Employees
• 8869: Child Daycare Center—All Other Employees
• 9059: California Only, Child Daycare Center—All Employees

Daycare insurance packages are not all the same. Some have more robust coverages. We offer a great target program for daycare centers with the very best coverages and affordable rates.
Get a complete daycare insurance quote with us today.