by Ed Sneineh

Owning and running a day care business is a great challenge for many reasons. Complying with the legal aspects of the business and meeting state requirements is just one. Hiring, training, and keeping the right and qualified staff is anther important issue. Finally, taking routine decisions about different administrative tasks, including decisions about insurance, is another challenge. Insuring a day care business is among the most challenging tasks that face day care centers, and insurance professionals as well. As an example of that challenge is apparent when we learn that some insurers will refuse to insure a strip mall, just based on the mere fact that a day care in that strip mall!

Day care centers can be classified in to two main types, one that provides daily care for children and the other type is the one that provides day care for the elderly. While the clients have different ages and shapes, they all have certain things in common- They all are incapable of caring for themselves, and they need someone else to care for them because of their mental incapacity. There are lots of rules and guidelines governing the conducts of these days cares and many questions related to their insurability.

Traditional Insurance Coverages for Day Care Centers

Whether a nursery for children or a day care for adults, certain coverages that day care centers need are the similar to other businesses. These coverages include:

Property Coverage: This includes coverages on the building (if owned), business property, office fixture, computers, signs, etc.

Commercial General Liability: Includes coverages for premises, advertising injury, and product liability. Sexual molestation is a coverage that is excluded in the general liability section, and because the nature of the business that involves caring for incompetent individuals insurance companies stress this exclusion and the methods to include it, if so desired.

Workers Compensation: This is an important coverage for all businesses to cover employees and staff for any work related accident. This coverage is mandatory by law.

Business Auto Insurance: Day care centers may need this coverage in the event they have a vehicle used in the course of business (utility vehicle, van or bus).

Sexual Molestation Insurance- A Special Coverage Needed For Day Care Businesses

As indicated earlier, an important coverage that might be needed by day cares is sexual molestation. Some companies offer limited coverage as an endorsement. Normally there is a lower limit for this coverage.

Sexual Molestation is offered at lower limits such as $50,000 or $100,000. There are not many companies that like to offer more than $300,000 for sexual molestation.

Information Affecting Day Care Insurance Rates

Insurance companies seek information from day care businesses that affect their eligibility. This information includes:

Location of The Business: Companies charge different rates based on ZIP codes because ZIP codes determine chances and frequencies of losses and claims.

Business Experience. Some insurance companies look at older businesses more favorably than newer business. Other companies my disqualify certain new day care centers from insurance.

Numbers of Attendants; Full Time, and Part Time Staff: Each company looks differently at the ratios of professional staff compared with attendants. Certain companies will disqualify day care centers if these centers do not maintain certain ratios.

Services Offered: Some day cares offer more than 'just care' such as counseling, medical care, services for challenged students, public transpiration, sport activities such as swimming and gymnastics. If so, all activities have to be disclosed to the insurer.

Hiring Practices: Insurers want to know if the business has any specific hiring policies including criminal background checks. Some companies will not offer any endorsement to include sexual molestation coverage if the business does not have adequate proof to exclude people with conviction of sex crimes.

Getting day care insurance can be a simple task if you have all the relevant information. However, providing inadequate or incorrect information to your agent can bring unpleasant results later.
Posted 12:03 AM  View Comments

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