One car accident has the potential to cause thousands of dollars of property damage, multiple injuries, and lawsuits.
A number of years ago a provider in Minnesota was driving four day care children in a van when it caught fire. Two children died. Their parents sued her and won hundreds of thousands of dollars in a judgment. But, because she didn’t have the proper car insurance her financial life is in ruins and she is no longer doing child care.
Do you have the proper insurance for your vehicle?
The only way to answer this question is to get a written statement from your car insurance agent that you are covered whenever you use your car for your business.
As a general rule, you existing personal vehicle insurance will cover you if you only use it “incidentally” for your business. If you use it “regularly” for your business, you will likely be told that you must get commercial car insurance.
The difference between incidental and regular use can mean the difference between full coverage and no coverage. Only your insurance company can determine how you are using your vehicle.
To ensure that you have the proper insurance it’s essential that you tell your insurance agent exactly how you use your car for business purposes. Your explanation should include how often you transport children and how often you use it to go to the bank, library, grocery stores, etc. for your business.
If you don’t tell your insurance agent all the ways you are using your car for your business, the insurance company may later say that you misrepresented your business use of the your car, and raise your premiums, deny your claim, or not renew your policy.
Get it in writing!
Once you have explained to your insurance how you use your vehicle(s), insist that he/she give you a written statement that says you are covered for every instance when you use the car for business or personal purposes.
If you don’t get something in writing that says you are covered as a family child care provider, it’s likely your insurance policy does not cover you when you use it for your business.
If you find out that your policy doesn’t cover you, now what?
You may need to purchase commercial insurance to cover you. Ask your agent about this. The additional cost may or may not be significant, depending on where you live. Otherwise, start looking for another insurance company. See my insurance directory.
Some providers have chosen not to transport children to keep their insurance costs down. It is simply too risky to transport children if you don’t have adequate insurance coverage.
Even if you are a terrific driver and you’ve never been in an accident, a freak accident could happen, or another driver could run into you. You can’t eliminate these risks by having the parents sign a permission slip or liability waiver in which they promise not to sue you – it won’t hold up in court.
Summary – Don’t get into your car with children unless you have something in writing that says you are insured.
Tom Copeland – www.tomcopelandblog.com
For more information, see my book Family Child Care Legal & Insurance Guide.