In-home daycares have become a popular form business, especially for retirees who still have backyard swing sets and toys. However, it can be a risky business.
Anyone who has or is considering starting an in-home daycare must take out the correct insurance policies.
Do not count on your homeowners policy
It is quite common for in-home daycare providers to assume that their homeowners policy will cover their daycare as well, but this is unlikely. Homeowners policies tend to be limited to standard residential use of the home. In-home daycares—and other businesses run from the home—are not covered.
Business coverage endorsement
If your homeowners policy does not cover business use of your home, ask about a business coverage endorsement. Although there is a fee, an endorsement provides extra coverage for an existing policy and is generally recommended for smaller businesses. If your daycare outgrows the endorsement, you may need to purchase a separate business insurance policy.
Why an insurance policy is important
Accidents happen, and so does getting sued. The risks are much higher with children, and not only because they’re accident-prone.
While adults might be partially at fault for their own accidents, an accident involving a child will likely be blamed entirely on your lack of attention.
Keep on top of local laws
Finally, you need to consider the interplay between insurance and your local laws. For example, a license may be required before opening the daycare, and part of getting that license may be getting the correct insurance coverage. Conversely, your insurance provider may demand proof of license before your policy becomes active. You may also need to follow all local laws regarding your business for your policy to remain valid. For example, if the law says no more than four kids per adult and you take on six, you may face legal ramifications and have your insurance claims denied.
Are you interested in learning about insurance coverage for in-home daycares? Speak with your insurance broker.
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