Day Care insurance – cost and types of policies

Whenever you budget the expenses of your business, Day Care insurance must be high on the list because you can’t always know exactly what could happen in the future.

With the protection provided by general insurance and all the other types of insurance we will tell you about, you can protect your business and yourself in case something unwanted happens.

Like any business owner, for your Day Care enterprise, you must consider how much financial liability you are taking on.

If your Day Care business runs without proper insurance, you are taking an enormous chance not just of losing some money but of a final wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the results of their actions. 

In this article, we are giving very general guidelines for startup businesses to outline what the main kinds of insurance that you need are, and where available, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your Day Care business?

What this means, for any Day Care business owner, is that if some company claims that your business caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your Day Care business is not protected by laws in the same way as states are, where edicts can place a “cap” on the maximum level of liability.

In some states, like New Jersey, there are specific monetary levels that limit the amount an adjudicator can award in any case against the state.

In a court case, it’s purely the privilege of the jury to award whatever amount they deem appropriate, even sometimes giving a plaintiff more than they have sued for.

When you are running your Day Care operations, you can’t escape responsibility for the outcomes of your actions.

Even more importantly, unless you have spent in advance the money necessary to have your business running as an LLC, all of that liability belongs to you as an individual.

What does Day Care insurance protect you from?

For your Day Care business, the most important kinds of insurance are meant to cover the risks to your business from accidents, from unexpected events, and from mistakes.

In addition there are some official kinds of insurance that various states require.

In the next few paragraphs, we will explain the most important points any Day Care business owner should consider when negotiating the insurance needed.

The main headings of insurance for your Day Care businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any Day Care business is dealing directly with other people, and that means you usually have the danger that some accident can happen to them themselves or else something of theirs can be ruined.

In such a case, they can require compensation.

General liability insurance policy for your Day Care business covers you against claims coming from injury to visitors or damage to their property.

It protects your Day Care business from the claims themselves and also to any associated court costs and legal fees of the lawsuits.

In many cases, it can also help you to qualify for extra business from city and state organizations, where contracts demand proper liability insurance.

The usual level of general liability insurance for your Day Care business would be with a boundary of $1 million for a single event and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your Day Care insurance operations.

Professional liability insurance for your Day Care business

In the event where a customer alleges some negligence, errors, or omissions in how you conducted your Day Care business for them, you can quickly have to fight a law suit.

Even if the case against you is decided in your favor, the cost of defense can be large, and the impact on your reputation can be damaging.

Most small Day Care business should have enough professional liability insurance to cover a single claim of $25,000, with annual cover of $50,000.

See the table in the cost of Day Care insurance section below for average prices of professional liability insurance for your Day Care operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that customers may claim that the results didn’t meet your description of function, or that your advice was basically incorrect.

You need to know the specific laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held liable for results caused by products claimed to be defective.

To cover yourself against any possible lawsuit, you need Product liability insurance for Day Care

Only you can estimate exactly how much insurance you need.

Best advice is to consult with experienced insurance agents, brokers or company representatives for support.

Commercial insurance

Commercial vehicle insurance for your Day Care business

Be careful! – practically all policies for private vehicle insurance do not cover any happening like theft or accidental damage when the van is being used for business purposes.

The best way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a direct commercial vehicle insurance package.

Commercial car policies cover the value of any vehicle in case of accident, malicious damage, fire, or theft.

As well, in case of any accident, the car itself, the content and any legal bills, medical expenses, and property damage is insured if your car is involved in an accident.

Most states, other than Virginia and New Hampshire, mandate this type of insurance.

The required value of the insurance depends on the depreciated value of the vehicle, and your declared level of cover of contents. 

Tools and Equipment insurance

Since your Day Care business needs unique and costly equipment, you know how much it can cost to replace it in case of any damage, loss, or theft.

The gear may be subject to malicious damage, deliberate fire, theft, other such unpredicted acts.

As well, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can eliminate your whole business in one stroke.

Unless you can afford to immediately replace such specialized gear quickly out of your own pocket, you must have full-level equipment insurance so that you can immediately buy any equipment needed to keep your Day Care business running.

It is hard to advise how much equipment insurance you need – it’s basically dependent on how much you have invested in your Day Care business’ equipment.

Commercial Property insurance

Any Day Care business that owns or rents space in a building should have a commercial property insurance policy.

If you own the property, you certainly have a substantial capital investment, as well as a big liability if there’s a mortgage.

Your physical building location must carry insurance coverage for the value of the premises and contents against natural occurrences like fire and storms, and against deliberate damages like theft and vandalism.

If your Day Care business works in areas of high risk, like Texas or North Carolina, additional coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Rhode Island, where extreme cold snaps can cause damage to outer coverings of Day Care business premises, there is a need for more supplementary cover than in warmer climes.

Because the level of cover depends mainly on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of Day Care insurance section below to give some indication of the average prices per million dollars of property insurance for your Day Care business.

Temporary insurance by month, week or day for your Day Care business

Is your Day Care business working part-time or casually, or is the level of business variable?

Using short-term insurance makes excellent sense. Business insurance by the month, day, or week – temporary insurance for Day Care – are special policies where you can cover a specific period when you want to be covered.

By only paying for that period of cover, you will save by having less premiums but still having adequate risk cover.

The important feature of short-term insurance is that you purchase the cover for a defined period – a designated date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of higher business activity, get the existing cover raised.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your Day Care business

You have the choice to combine a few of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP combines commercial property and public liability insurance by amalgamating these coverages into one insurance policy, which can save you money.

BOP insurance will cover you if any claims of injury or property damage are made.

It is often the right choice for small and medium-sized Day Care businesses, such as yours.

There are a few limits that will dictate whether BOP is suitable for your own business.

BOPs cannot cover your professional liability or commercial vehicle risks.

Also, the size of your business will rule whether you are eligible to take out BOP cover.

The typical business that can take out a BOP policy must have fewer than one hundred employees, and not more than five million dollars in annual sales.

As well, you must separately take out the required worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your Day Care business employees

In most states, it is mandatory to have workers compensation insurance when your Day Care business has one or more employees.

Workers compensation insurance covers the business against any costs that arise if a worker experiences an injury or becomes sick as a result of work.

The benefits provide for medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s requirements in this regard can leave you as the employer having to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only allow coverage from the government-run monopoly state funds.

In these states, you can’t obtain your workers compensation obligations from private insurance corporations.

Workers compensation premiums are worked out based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must see the relevant authorities in your state.

Average costs of these types of insurance

Although every Day Care insurance level is unique, there are enough examples of usual quotes from insurance companies for us to give rough guidelines, including what are the cheapest rates offered.

Of course, you should always check with an agent what’s relevant for your business.

The list below is of annual premiums we have researched for the main types of insurance your Day Care businesses needs.

Cost of insurance for your Day Care operations depends on many different factors.

We have reckoned these figures for small self-employed Day Care businesses.

In larger states like California, premiums are generally about 20%-30% higher than national averages, but in smaller states like Oregon, they usually are about 20%-30% lower.

The location and size and type of your Day Care business can have a big effect on the cost of different policies.

You should discuss with professional insurance agents and brokers, or insurance company representatives.

As well you can let the internet do the work for you by looking for insurance companies near where your business is located.

Another useful source of information is the local Better Business Bureau in your town.

FAQ

What is small business insurance for Day Care operations?

This is a general term used to describe basic insurance policies designed to protect Day Care business owners from risks like bodily injury, property damage, claims of negligence.

Does my Day Care business have to have insurance?

Some of the types of insurance are not mandatory for you to operate your business, but they can protect you from risks in your business operations.

Some other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small Day Care business insurance policy cover?

Liability insurance provides insurance against lawsuits or claims filed by a customer for bodily injury, property damage, or negligence.

The exact cover will vary based on your own operations.

See the table in the costing section above for average prices of the most common policies for Day Care insurance.

How much will Day Care business insurance cost?

As well as the size of the business, some other factors, such as location and claims history, are used to determine your policy’s cost.

You should consult with professional insurance agents and brokers, or insurance company representatives.

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