Working with children is so rewarding. The innocent laughter, their curiosity, the way they soak up everything like little sponges. That’s probably why you decided to open a daycare facility in the first place. But, let’s face it—children are prone to accidents. When you started your daycare business, you worked hard to make it successful. Now, you need to look into insurance to protect yourself and your business. We cover the types of insurance you’ll need, how much they cost, and the 6 best daycare insurance companies for your consideration.
- The 6 Best Daycare Insurance Companies
- What is Daycare Insurance?
- What Types of Insurance does a DayCare Business Need?
- What Types of Insurance does a Home DayCare Business Need?
- What Types of Insurance does a Commercial DayCare Center Need?
- How Much does Home Daycare Insurance Cost?
- How Much does Commercial Daycare Insurance Cost?
The 6 Best Daycare Insurance Companies
Daycare insurance is a niche business, but there are some companies out there who have policies written just for daycare business. Their policies often include 2 or more of the 7 policies that daycare business usually need. We discuss the details of these 7 policies below. Here are our top 5 picks of daycare insurance providers after comparing 12 different small business insurance companies.
- CoverWallet: Best for Comparing Online Quotes
- Simply Business: Best for finding low-cost daycare insurance
- American Family: Best Daycare Insurance for Those Who Want a Do-It-All App
- Markel Insurance: Best Online Resources of Daycare Insurance
- Assure Child Care: Best Daycare Insurance for Affordable Rates
- Next Insurance: Best Daycare Insurance for Fast and Simple Quoting and Purchase
CoverWallet: Best for Comparing Online Quotes
CoverWallet is a digital broker specializing in small business insurance. They work with several business insurance companies and are able to provide quotes from these companies for you to compare and select the best one for your business.
If you are new to buying insurance for your daycare business, you should give them a call to discuss your business with one of their agents. Their agents are very knowledgeable and experienced in business insurance industry. They will be able to explain to you the nuances of business insurance, especially in daycare business. After comparing quotes from several companies, you can make your own informed decision.
Simply Business: Best for finding low-cost daycare insurance coverage
Simply Business is another small business digital brokerage. They focus on helping small businesses, including daycare businesses, find low-cost coverage from the 30+ carrier partners that they partner with. They have built their quoting platform and operational system in such a way that it favors finding the coverage with the lowest cost for their customers.
This choice sometimes makes it difficult for them to be able to provide several quotes online for you to compare since the carrier offering the cheapest quote may not be able to provide that online. In these cases, they prioritize providing you with the cheapest quote, rather than online quotes, ie. they will need to discuss your quote option on a phone or by emails. In several cases, they are still able to provide quotes online though.
If your main goal is to find the cheapest daycare liability insurance, you may want to give them a try.
American Family: Best Daycare Insurance for Those Who Want a Do-It-All App
American Family offers in-home daycare insurance with limited property and liability coverage that can be added as an extension of your homeowners’ insurance.
They only offer in-home daycare coverage if you take care of six children or less—be sure to count your own children in this number. The app allows you to file a claim, pay your bill, and see proof of insurance, all available 24/7.
Products American Family insurance offers:
- General liability
- Commercial auto liability
- Corporal punishment liability
- Abuse and molestation liability
- Umbrella insurance
American Family will not do an online quote for a daycare business—you are asked to call to talk to an agent about your business. Also, they don’t insure every state, so make sure you check with an American Family agent.
Markel Insurance: Best Online Resources of Daycare Insurance
Markel insurance has offered commercial daycare insurance for over twenty years. They insure many different types of daycare facilities, including:
- Licensed child care centers
- Nursery schools
- Montessori schools through kindergarten
- Before-and-after school programs
- In-home child care
Markel has a number of nifty services for the in-home daycare provider. They can pair you up with a service that will do a background check on all potential employees (at a discount), and they can give you a hazard assessment, which rates driving through a virtual skills test. They also have articles on toy safety and getting ready for winter.
Markel quoted us $475 for a policy with $900,000 liability limit for our daycare business
Assure Child Care: Best Daycare Insurance for Affordable Rates
Assure Child Care works with Philadelphia Indemnity Insurance Company to provide insurance for licensed childcare providers in 44 states. Philadelphia Indemnity has an A++ rating from A.M. Best, so you don’t need to worry about them not having resources to pay out claims. They can offer you both Group Accident and Liability Insurance, and Workers’ Compensation insurance.
On the website, you can review your payment history, make changes to your policy, or obtain a certificate of insurance.
To apply for insurance, you need to fill out the online for, become a member, and secure it with a credit card.
Next Insurance: Best Daycare Insurance for Fast and Simple Quoting and Purchase
Next Insurance is a new insurance company that started in 2015. Their goal is provide small owners with affordable insurance policies with an easy, online process. They have a simple online quote process, and you can pay your premiums monthly at no extra charge.
Next is so efficient with the online quote process because they rely on AI technology. However, if you want to, you can work with a human agent.
You can get a certificate of insurance as soon as you need it—instantly, if you like. Most online reviews rave about how easy and simple the process to buy a policy is, and that customer service is very good.
These are some of the questions Next asked about our daycare facility:
For our hypothetical daycare business, Next gave us this quote:
Changing the level of coverage will change the quotes just a few dollars. So it’s up to you how much coverage you’re comfortable with.
What is Daycare Insurance?
Day care insurance is a special type of business insurance designed to meet the needs of daycare providers.
There are two types of day care centers, and both would do well to explore their insurance options. Many states require that daycare facilities be licensed, and if so, they will also require insurance.
- In-home daycare
- Commercial daycare
What Types of Insurance does a Daycare Business Need?
- General liability insurance
- Commercial Property insurance
- Professional liability insurance
- Commercial auto insurance
- Abuse and molestation coverage
- Workers’ compensation insurance
- Umbrella insurance
Not all day care providers will need all of the 7 different types of business insurance policies listed above, and if you just occasionally babysit for someone in your home, you don’t need day care insurance at all.
General Liability Insurance for Daycare Business
This covers third-party claims for bodily injury, property damage and advertising injury or harm to your reputation. If you get only one type of insurance, make it general liability insurance. Small children are accidents waiting to happen. General liability insurance will protect you when one of your charges climbs on your kitchen counter and then falls down and breaks an arm.
Some states require some level of general liability insurance for daycare facilities, so be sure to check your states regulations.
>>MORE: How Much does General Liability Insurance Cost?
Commercial Property Insurance for Daycare Business
This covers assets, building, equipment, and supplies you need to do your business. For a day care provider, this might include art supplies, toys, and some furniture.
If you operate a day care center out of your home, you might not need it. The structure of your house is covered under your homeowners’ policy, so you don’t need to cover it. However, your homeowners’ policy might require you to cover your in-home day care center under a separate policy. If you don’t, they could cancel your homeowners’ policy.
If you run a commercial day care center and rent space somewhere, you might want commercial property insurance.
Professional Liability Insurance for Daycare Business
This is also called Errors and Omissions (E&O) insurance, because it protects you in case you make a grievous error that results in harm to a client. This covers you and your employees from claims of negligence.
For example, you allow the children to go outside to play. A bee stings one of the children and it turns out that they’re allergic. Here’s where professional liability insurance will help you.
>>MORE: Best Professional Liability Insurance Companies for Small Business
Commercial Auto Insurance for Daycare Business
If you don’t pick up and transport children to and from your day care facility, you don’t need commercial auto insurance. But if you or any of your employees take children on field trips or regularly drop them off, you should get a commercial auto policy. Your personal vehicle will be covered while it’s being used for your business in case of an accident.
>>MORE: How Much does Commercial Auto Insurance Cost?
Abuse and Molestation Coverage for Daycare Business
It’s a sad fact of modern life that working with children sometimes included allegations of abuse. Whether the abuse happened or didn’t happen, you should consider Abuse and Molestation Coverage. This will cover your legal costs of defending your business in court. Sometimes it’s included under your general liability policy, but not always, so be sure and read your policy carefully.
Workers’ Compensation Insurance for Daycare Business
If you have employees, workers’ compensation insurance is a must since it is required by law. This will cover the costs of employees work-related injuries or illnesses.
Say your employee arrives bright and early for work one snowy morning, before you shoveled the walk. When they slip on the ice and break a wrist, workers’ compensation insurance will cover their medical bills and lost wages. In some states, workers’ compensation insurance is required if you have just one employee. Check your states regulations.
Umbrella Liability Insurance for Daycare Business
This is liability insurance that kicks in after you reach the limits of your other liability policies. A long and messy court battle can easily exceed those limits, so it might be a good idea to consider Umbrella Liability insurance.
What Types of Insurance a Home Daycare Business Need?
A home daycare business is a lot simpler than a commercial daycare center and with a much smaller operation. As such, they would need lesser insurance coverage. Here is the insurance coverage a home daycare business would need: general liability insurance with abuse and molestation coverage and professional liability insurance.
Learn more at Home Daycare Liability Insurance: Cost & Coverage
What Types of Insurance a Commercial Daycare Center Need?
With a much bigger operation and taking care of more children in a commercial center, ie. not in a home, a commercial daycare center needs the following coverage: general liability insurance, professional liability insurance, abuse and molestation coverage, commercial property insurance, and workers’s compensation insurance.
They may also need commercial auto insurance if they pick up and deliver children to and from the center.
Lastly, they may also consider an umbrella liability insurance policy to be fully protected. A law suit involved children safety and well-being is often long and complicated. They might need additional protection in such case.
What Affects the Cost of Daycare Insurance?
Many things will affect what you will pay for daycare insurance, including:
- How many children you care for
- Whether or not you provide transportation
- Whether you do background checks on employees
- Whether you are licensed
- If you allow children outside without supervision
- If you have any employees with criminal records
Many states require that daycare facilities be licensed and insured. Even if your state does not require insurance, parents like to see that the daycare facility is insured, so it may bring you more business.
How Much does Home DayCare Insurance Cost?
A typical home daycare business looks after 2-5 kids. For such a business, you will need to have both general liability insurance and professional liability insurance polices. On average, a general liability insurance policy for a home daycare business costs about $50 a month or $600 a year. And a professional liability insurance for the same home daycare business costs around $15-20 a month or ~$200 a year. If you choose to combine both policies in a home daycare insurance policy, it would cost around $60 a month or $720 a year.
Different insurance companies will give you different quotes, make sure you shop around and compare quotes before making your decision. Shopping with a digital broker like CoverWallet or Simply Business is a good option to be able to compare several quotes in one place.
How Much does Commercial Daycare Insurance Cost?
Commercial daycare center might need to have more insurance coverage as we discussed above. The insurance cost depends on the types of insurance the commercial daycare center choose to have
Regardless of the policies, you should always shop around to compare quotes of different companies. At least, compare quotes on one of the digital brokers like CoverWallet or Simply Business before buying.
What factors affect the daycare insurance cost?
There are many factors that affect daycare insurance cost. The most significant factors are the type of business, size of the business, location of the business, and the insurance company.
Size of the daycare business
The size of the daycare business is the second factor that affects the daycare insurance cost. The bigger the business, the more kids the daycare business has, and the higher the insurance cost will be. This is because there is more risk for the insurance company if something happens to the business.
Commercial or home daycare business
Insurance costs vary significantly between a commercial and a home daycare business. Commercial daycare business is usually much bigger a home daycare insurance and we know that size affects the insurance cost. In addition, commercial daycare businesses are subject to more and stricter regulations, which may result in more insurance coverage and higher cost.
Location of the daycare business
The location of the business is also a factor that affects the daycare insurance cost. If the daycare is located in a high-risk area, such as an urban area or an area with a lot of crime, then the insurance cost will be higher. This is because there is a higher chance that something will happen to the daycare and the insurance company will have to pay out claims.
The final factor that affects daycare insurance cost is which insurance company you choose to work with. Different companies charge different rates for their coverage, so it is important to compare quotes before you choose one.
How to find cheap daycare insurance
Finding cheap daycare insurance can be a challenge, but it is not impossible. Here are a few tips to help you find the best deal:
Don’t just settle for the first policy you find. Comparison shop to find the best deal. Work with a broker like Simply Business or CoverWallet is a great way to get and compare several quotes in one place to find the cheapest one for your daycare business.
Bundle your coverage
Many insurers offer discounts if you bundle your insurance policies together. If your daycare business is relatively small, especially if you run it from your home, consider to get a Business Owners Policy (BOP) which bundles both general liability and commercial property coverages in one policy to reduce the costs.
Ask about discounts
Many insurers offer discounts for things like being a member of a professional organization or for having a good driving record. Ask about any available discounts and see if you qualify.
Compare premiums and coverage.
Don’t just compare premiums; make sure you are comparing apples to apples when it comes to coverage. Only get the coverage that you need. You can always reduce the coverage limits, premiums will reduce accordingly.
Get quotes online
You can get quotes quickly and easily online. This is a great way to get started on your search for cheap daycare insurance.
Daycare liability insurance
Daycare liability insurance is insurance that provides coverage for daycare providers in the event that they are sued when kids are injured while being in their care. These injuries can be caused by daycare staff’s negligence, mistakes, or other reasons. Typically, a good daycare liability policy combines the coverages of general liability and professional liability.
This type of insurance typically covers things such as injuries to children that occur while in the care of the daycare provider, and damage to property owned or rented by the daycare provider.
Daycare liability insurance is the most important insurance policy for all daycare providers, as it can help protect them from costly lawsuits. Without this type of insurance, providers could be held liable for any damages that occur while children are in their care.
Providing daycare for children is a rewarding and demanding job. Don’t forget to buy business insurance to protect yourself and your business.
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