Ask the Advisor is a weekly PaySimple column featuring reader-submitted small business questions answered by our panel of business professionals. If you would like to submit a question, or become a PaySimple business advisor, please read the information at the bottom of this article.
This week’s small business question is answered by Whitney Smith, commercial insurance agent with Signature Select LLC – an IMA Company.
“What type of insurance coverage do I need to protect the business operations and children in my commercial daycare center?”
Thank you for your question. This April, U.S. employment rose by 165,000 workers, which means more parents will be outside of the home for extended periods of time, and the demand for professional child care services is growing.
Coverage for your daycare center will most likely include the following types of coverage:
Property: The physical space in which you operate (if owned) and the property you have inside the building to operate your business (i.e. computer equipment, office furniture, tables & chairs, etc). Also included in property coverage is coverage for the potential loss of income you would experience if, for some reason, you had to close your doors for a period of time. Property also includes breakdown coverage for the equipment in your building (i.e. HVAC Equipment, Refrigeration, etc)
General Liability: This is a big one. The protection and safety of the children is of utmost importance. If an accident happens, a child is injured, and parents file suit against your business, your general liability is there to defend the daycare and pay settlements. This policy also provides a ‘no-fault’ medical payment coverage for small injuries to children, typically provided with a limit of $5,000. In addition, it is very important to add sexual abuse and molestation coverage to your policy, to protect your company against any allegations of misconduct.
In addition to the coverage discussed above, I would always recommend an additional layer of protection by purchasing an umbrella policy. An umbrella policy provides increased limits, should there be an accident that settles above your limits.
Professional childcare is a great option for working parents. As a childcare business owner, there are many options available to protect your business, one being, adding background checks on new employees. I am here to help you manage the risks involved with professional childcare and help build a program that is specific to your business. I look forward to talking with you!
About the Advisor
Whitney Smith is a Commercial Insurance broker with Signature Select LLC, an IMA Company. Signature Select specializes in property and casualty insurance, including worker’s compensation and professional liability, for small and mid-sized companies. You can contact her directly: 303.615.7645 www.imacorp.com
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