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Best Insurance for Childcare Providers

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A childcare business can be a gratifying endeavor. Childcare providers nurture young ones and witness the growth and learning of the kids in their care every day. 

It’s important to keep both your staff and the children safe and protected. Our guide to childcare insurance will help you understand your options and find the best carriers for your small business.

Best Childcare Insurance

Insurance products designed for childcare providers are available through specialty carriers and online insurance sellers. Whether you operate your childcare business from a local facility or your home, you’ll need different types of insurance.

If you aren’t sure about the insurance products suitable for your business, start with a few quotes from our recommended insurance carriers below.

Mobile App
Yes
Get Quote Online
Yes
Get started securely through The Hartford’s website
Mobile App
Yes
Get Quote Online
Yes
1 Minute Review

The Hartford is a leader in casualty and property insurance. It brings more than 200 years of experience in developing and providing insurance products. The company uses a quote-based pricing scheme to offer insurance in 2 main segments: commercial and personal lines. 

Its commercial segment serves over 1 million small businesses. The personal segment offers only nationally-endorsed home and auto insurance through the AARP® Insurance Program. The Hartford sells its products mainly through a network of independent brokers and agents. 

The company is also a 12-time honoree for the world’s most ethical companies according to The Ethisphere Institute. It delivers the name recognition and reputation of an experienced insurance carrier.

Best For
  • Those looking for an experienced insurance provider
  • Multiple coverage options with 1 carrier
Pros
  • More than 200 years of insurance experience
  • Provides online quotes
  • Has a solid financial rating
  • Offers a wide range of commercial insurance products
Cons
  • Pricing is entirely quote-based
Mobile App
No
Get Quote Online
Yes
Get started securely through Mylo’s website
Mobile App
Yes
Get Quote Online
Yes
Get started securely through Thimble Business Insurance’s website
Mobile App
Yes
Get Quote Online
Yes
1 Minute Review

It’s not often that you see something new in the insurance space but Thimble has come up with something unique — flexible small business insurance. You can buy liability insurance policies by the month, the day or even by the hour. Even better, you can apply in under 60 seconds. In this Thimble review, we’ll dive into how it works and how it can benefit your business. 

Best For
  • Handymen, landscapers and contractors
  • Self-employed individuals
  • Seasonal business owners
  • Freelancers who do multiple types of work
Pros
  • Flexible general liability and professional liability policy options
  • Fast application process
  • Ability to pause monthly coverage
  • High-quality mobile apps
Cons
  • Doesn’t offer business interruption insurance
  • Doesn’t offer commercial property insurance
Mobile App
Yes
Get Quote Online
Yes
Get started securely through Hiscox’s website
Mobile App
Yes
Get Quote Online
Yes
1 Minute Review

Hiscox, a business insurance company headquartered in Chicago, specializes in policies for small businesses. You’ll find general liability, professional liability and property insurance offered through brokers and online.

Best For
  • Small businesses
  • Businesses hiring their first employee
  • Businesses with part-time or full-time employees
Pros
  • Specializes in small businesses
  • Offers a discount for bundling policies
  • No added fees for monthly payment option
Cons
  • Not the best option for larger businesses
Mobile App
No
Get Quote Online
Yes
Get started securely through coverwallet’s website
Mobile App
Yes
Get Quote Online
Yes
Get started securely through Progressive’s website

Types of Childcare Insurance

Daycare providers need various types of insurance to protect their business. Here are some of the most sought-after daycare business insurance options:

General Liability Insurance

General liability insurance for your daycare business covers the costs of 3rd party claims for property damage or bodily injury. Liability insurance also protects your small business from claims of slander and advertising injury. 

The main areas of general liability insurance coverage include:

  • Medical payments. Anyone who is physically injured in your business premises, irrespective of negligence, is entitled to medical bill payment. 3rd parties may also receive settlement for more serious injuries and incidents causing death. Slip-and-fall cases are common sources of bodily injury claims.
  • Property damage. A general liability policy covers any incidents resulting in property damage for 3rd parties like customers or bystanders. The occurrence of property damage must not be as a result of negligence. Your business could be at fault but not negligent.
  • Advertising injury. Advertising injury means ruining someone’s reputation through slander or libel. You risk a personal injury claim if your business or its employees make statements indicating that another person is irreputable. A general liability insurance policy protects you from claims made from social media posts or oral comments.

Commercial Property Insurance

Commercial property insurance covers your daycare’s assets, including your building, furniture, equipment and inventory. You may insure your property for its replacement cost or actual cash value. If you make a claim, replacement cost coverage will pay the repair costs up to the covered limit while actual cash value will deduct depreciation from your claim payout.

Commercial Auto Insurance

Your childcare facility also needs to obtain auto insurance to protect against claims resulting from accidents involving cars used by the business. Your personal car insurance policy won’t pay for claims made against your business. Daycare businesses are required to carry at least liability for damage caused to others. 

Additional coverage options may include:

  • Collision for damage to your car after it’s hit by another vehicle.
  • Comprehensive for any damages to your vehicles resulting from other incidents other than a collision.
  • Medical payments cover medical bills sustained by you and your passengers.
  • Uninsured and underinsured motorist covers all costs if the driver at fault doesn’t carry insurance or has inadequate coverage.

You’ll need non-owned car insurance if some of your employees use their personal vehicles to run business errands.

Professional Liability Insurance

Parents and guardians could sue your childcare facility for injuries allegedly caused by now providing the level of service expected of you. A professional liability insurance policy will pay the defense costs if you’re accused of causing harm when rendering services. 

For instance, a professional liability policy will cover you if you’re accused of not teaching a kid to read as expected or serving milk to an allergic child.

Abuse and Molestation Insurance

A parent may sue you based on allegations that their child was sexually molested or physically abused. The claims may arise from acts that were allegedly committed by yourself, an employee or a visitor. An abuse and molestation insurance policy will cover such accusations, even when they have no grounds.

You will most likely face accusations for failing to supervise your employee or hiring someone without conducting a proper background check. Abuse and molestation insurance is available as a stand-alone policy or as an endorsement on a liability insurance policy.

Workers’ Compensation Insurance

Workers’ compensation insurance pays for the costs arising from work-related illnesses and injuries, including medical bills and lost wages. It will also pay all legal fees if an injured employee decides to sue your business.

Umbrella Liability Insurance

Umbrella insurance offers additional coverage should claims made against your business exceed your policy’s limits. Umbrella insurance will pick up from where your general liability or auto insurance policy falls short. You may need umbrella insurance if you’re renting a bigger space or hiring additional personnel.

Cost of Childcare Insurance

The cost of childcare insurance is unique to every business. It will cost less to insure a home-based childcare business compared to a commercial daycare facility. 

Other details and business characteristics insurers consider when setting premiums include:

  • Number of employees. The cost of your business’ workers’ compensation insurance policy will depend on your payroll size. You will pay more for coverage if you have more staff on board. Employees will also increase your liability risk, so you’ll pay more for general liability insurance.
  • Amount of business revenue. You can expect to pay a higher premium if you record higher revenues. Insurance companies assume you have more to lose in the event of a lawsuit.
  • Coverage limits. Opting for a higher coverage limit will increase your childcare insurance costs since your carrier will pay more for compensation.
  • Claims history. Insurers will consider the possibility of filing a claim when insuring your business. You can expect to pay a higher premium if your business has a history of filing claims.
  • Your industry exposures. Since taking care of children and providing daycare services is fairly low-risk, you’ll obviously pay less for coverage compared to higher-risk industries like logging.
  • Deductible amount. You can choose a higher deductible amount to lower your premium rates, but you will pay more out-of-pocket in the event of a claim.

How Childcare Insurance Works

Facilities that care for children need childcare insurance – a group of business policies designed for childcare providers. You’ll need this type of insurance whether you run a home-based daycare business or have a commercial childcare facility. With each policy protecting against a specific risk, your daycare business will need more than a single policy.

Many insurers will let business owners combine general liability and commercial property insurance in a single business owner’s policy (BOP). You’ll need to purchase workers’ compensation insurance if your business has more than 1 employee. Commercial auto insurance is also essential if your business operates a fleet.

We also recommend that you purchase professional liability insurance to protect your business from claims that it didn’t render services appropriately. An umbrella policy will also protect you from any costs beyond your policy limit.

Protect Your Childcare Business

Whether it’s a commercial childcare center or a home-based daycare, your business faces unique risks. An accident within your business premise or legal actions against claims of slander could present a huge financial challenge to your business. Having the right insurance in place will help you run your business with peace of mind, knowing you’re covered from the unexpected. For more information on childcare coverage, contact our recommended carriers today for your no-obligation quote.

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