If one of the children in your care gets hurt in your home or on a field trip, you may have to pay a lot of money to the child and his family. Liability insurance is an agreement in which a company promises to pay the medical expenses and damages of someone who gets hurt in your home. Liability insurance can protect you and your possessions, up to the limits of the policy, if a judge decides that a child and his family should be paid.
WHY DAY CARE PROGRAMS SHOULD HAVE LIABILITY INSURANCE
If you have a liability insurance policy, you will not have to worry that someone might sue you. If you do not have liability insurance, how would you pay $100,000 or more if a judge said you had to? Would you have to sell your home and your car? If you have liability insurance, the insurance company would pay up to your policy's limits.
DOES HOMEOWNER'S OR RENTER'S INSURANCE COVER LIABILITY?
No, unless there is a special form on your policy, your homeowner's or renter's insurance will not cover liability for your day care program.
WHAT INJURIES ARE NOT COVERED?
Most liability insurance policies will not cover injuries caused by dog or cat bites, using your car to take a child somewhere, giving a child pills or medicine, hurting a child (for example, by spanking hard) or having any kind of sex with a child.
Always read your insurance policy and look for exclusions, or things the company will not cover. Even if you have liability insurance, it is important that your program be safe. It is your responsibility to provide a safe environment with good supervision so that children do not get hurt.
Parents are more likely to sue you if they think that you have been negligent. Negligent is the legal word used when a person who is responsible for taking reasonable care fails to do so. If a child gets hurt while you are watching television instead of watching your day care children, for example, you may be negligent.
COST OF LIABILITY INSURANCE
Each year the cost of liability insurance increases. You should get an estimate from an insurance agent. Talk to several agents about what kind of coverage you should have and how much it will cost. When you do your income taxes, you can subtract the insurance cost from your income as a business expense.
GETTING LIABILITY INSURANCE
Some insurance companies will cover you by adding to your homeowner's or renter's insurance. They charge an extra fee for this coverage. You can also buy a policy to cover just liability for your day care business.
INSURANCE COMPANIES
Be sure to ask if your insurance company is an "A" rated company. This means it is more likely that the company will be in business if you need it to pay a claim. This information is not complete. Contact your insurance agent and read your insurance policy for complete details.
RESOURCES TO EXPLORE
Call your state licensing agency for names of insurance companies. Your Child Care and Adult Food Program sponsor may also provide you with information. Contact insurance agents and ask them about the policies they offer. Talk to other day care providers in your area, and discuss liability insurance with them.
Reprinted with permission from the National Network for Child Care - NNCC. What you should know about liability insurance. Marilyn Lopes (Ed.) CareGiver News (August, p.4, 1993). Amherst, MA: University of Massachusetts