Questions and Answers on Legal and Insurance Issues from an Iowa Webinar

“Do the legal/physical custody rules apply to grandparents?”

“What are my liability risks if I ride a city transit bus with day care children?”

“If my 14-year-old daughter babysits a child in my home, outside of daycare hours, how does/can that impact me with my daycare business?”

These are some of the questions asked by family child care providers that I answered during a recent webinar “Legal & Insurance Issues” sponsored by Child Care Resource and Referral of NW Iowa.

Custody Issues

Q: A mother and her fiancée are living together with the children in their home.  The fiancé is authorized to pick up the children.  Can the father keep the fiancé from picking up the children?

A: Biological parents have full rights to their children until a court takes them away. If the court has given full physical custody rights to the mother, then she can have her finance pick up the children and the father can’t do anything about this. If the court has not limited the rights of the father, then he must go to court to get full physical custody to prevent the fiancée from picking up the child.

Q: Do the legal/physical custody rules apply to grandparents who now have custody of a grandchild? I do have a copy of their order. But it doesn’t specify legal/physical.

A: If the court order you have doesn’t clearly state that the grandparents have either joint or full legal or physical custody, contact the court and ask for a clarification. The general rules about custody do apply to grandparents, so it’s possible they do have legal and or physical custody.

Q: I currently have a foster daycare child taken from the mother.  What is the procedure if she should show up to pick him up?

A: You want to see a copy of any court order that limits the rights of the mother and gives them to the foster parents. Follow whatever the court order says. If the court order says that the foster parents have full physical custody, then the mother is not authorized to pick up the child. If she does show up, ask her to leave and call the police if she does not.

Q: I have a family going through a divorce situation.  Parents each have the kids 3 days in a row. Should I get a copy of the temporary custody agreement just in case dad comes to pick up on mom’s day?

A: Yes, get a copy of any temporary custody agreement. If the agreement comes from a court, then you must follow it. In this case, if the father showed up on the mother’s day, ask the father to leave and then call the police if he won’t. If it’s an agreement between the parents, without the court involved, follow their agreement – however, either parent would still have the right to pick up their child on any day they wanted.

Q: You used the term physical and legal custody, but what does sole custody mean?

A: Physical custody means who is providing food, clothing and shelter for the child. Legal custody means who has the right to make decisions on behalf of the child. Sole custody means one parent has full physical or legal custody rights. Shared custody means the mother and father share physical or legal custody.

Q: A mother has enrolled in my program. I have not seen the father. What should I do if a man claiming to be the father shows up to pick up the child?

A: Since you don’t know that the man showing up is the father, ask him to wait until you can confirm his identity by contacting the mother. If you can’t reach the mother, or the person insists on taking the child, call the police. It’s always best to require both parents to show up before you enroll the child so you know who each parent is.

Q: What if a parent has a safety plan from a DHS caseworker saying the child cannot be picked up by the father, does that count, or is that not the equivalent of a court order?

A: This is not the equivalent to a court order and should not be followed. Only a court can restrict the rights of a parent, not DHS.

Q: Can I deny care if parent states there is a court order and refuses to provide it to me?

A: If a parent says they have sole physical custody, but refuses to provide you a copy of the court order, you should tell the parent that you will allow the other parent to pick up the child anytime.

Q: I only let people who are listed on the pickup list in my contract pick up the kids. Is that okay as long as they are listed?

A: Yes. However, biological parents still can pick up their children, even if they are not on the pick-up list, unless a court order restricts their rights.

Q: If a parent has legal parental RIGHTS to a child, but does not have legal CUSTODY, we still have to release the child to that parent, don’t we?

A: There is physical custody and legal custody. A parent who has legal custody, but not physical custody does not have the right to pick up their child, without the permission of the person who does have physical custody.

Liability Insurance Issues

Q: If I go out of business and am sued later by a child who was injured in my program, which business liability insurance policy that I purchased over the years would protect me?

A: Most business liability insurance policies are “occurrence form” policies. This means, you will be covered if the accident occurred while you had their policy. If you have a “claims made” policy it will only cover you if you have the policy in force at the time you are sued. Therefore, you want to save a copy of your insurance policies until you go out of business and the last child in your program turns either age 18 or 21, depending on the state you live in.

Q: What are my liability risks if I ride a city transit bus with day care children?  Because of the cold weather we are no longer walking to story hour at the library. My parents value the visit to the library so much they have all agreed to pay for the bus to get the children there.  Do I have any extra worries there?

A: If an accident happens while on the bus, it’s the responsibility of the city. If a child is injured after getting off the bus, you’ll want to have business liability insurance to protect yourself. Get written parent permission for taking these field trips to the library.

Q: If my 14-year-old daughter babysits a child in my home, outside of daycare hours, how does/can that impact me with my daycare business?

A: You want to make sure your child care licensor is aware of this and tells you it’s not in violation of any child care licensing rules. You want to contact your homeowner’s insurance agent to make sure your home and its contents are covered while she is caring for children. You want business liability insurance to cover you and your daughter if an accident happens while she is caring for children.

Q: My policy only covers five children. When I purchased it, I watched five children (ten years ago) but I now watch more. I know that there are not many insurance providers in Iowa that cover more than five children. Do you know any?

A: You want to stop caring for more than five children immediately. If a child is injured in your home when you have more than five children your insurance will not cover you. To find insurance companies that cover providers, go to my insurance directory:

Homeowner’s/Vehicle Insurance

Q: So, what should we do if my homeowners’ insurance doesn’t cover my business property?

A: Many homeowner’s insurance policies limit coverage for business property to $2,000. Therefore, you should contact your insurance agent and ask if your property is fully covered. Get the answer in writing. If you aren’t covered, purchase business property insurance.

Q: My boyfriend has the home owner’s insurance & I have a separate business liability insurance & a contract that says I rent space from him in our house (which is in his name only). Should I also have renter’s insurance?

A: Your boyfriend needs to contact his homeowner’s insurance agent to make sure his policy still covers him and his property. If any of the property in the home is owned by you, you want to get renter’s insurance to cover yourself.

Q: If I ONLY transport children in emergency situations, outlined in my Preparedness Plan, do I need additional coverage on my vehicle?

A: Maybe. It depends on your particular car insurance policy. You should contact your car insurance agent, tell him/her exactly how you use your car for business purposes (transporting children and using it for other business purposes) and find out if you are covered. Get the answer in writing to make sure you will be covered.


Q: I took on a new family and the day after that their old provider call to tell me about the troubles they had them. Is this okay?

A: It’s okay for you to listen to what the previous provider said. It’s not okay for her to tell you anything about a past client without the written permission of the parent for her to talk to you. Information about current as well as past clients should be held confidential unless you have written permission to share. She is in trouble, you are not.

Q: I had a parent leave a bad review on my Facebook page. The information she wrote was completely untrue such as me smoking around the kids and I don’t smoke. Is there anything you can do about something like that?

A: The comments may be in violation of Facebook policy. Contact Facebook and ask that the post be taken down. Tell your licensor about this. Have only of your parents post a positive comment about you. Don’t directly engage the parent.

Q: With all this discussion about purchasing insurance, how does one earn a profit?

A: Sometimes, it’s not easy. Insurance should be viewed as a cost of doing business. Some providers pass on part of the cost of their insurance premiums to parents to help reduce the costs.

Q: What did you mean when you said time-space deductible on the homeowners/renter’s insurance?

A: Providers are entitled to deduct the business portion of all items that are used for both business and personal use, include homeowners and renter’s insurance. The Time-Space Percentage is the formula providers can use to determine their business portion of such shared expenses.


I conduct monthly webinars through the National Association for Family Child Care. See my schedule here. I also conduct webinars for local organizations such as Child Care Resource and Referral of NW Iowa. Here are the details for sponsoring a webinar by me for your organization.

Tom Copeland –

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For more information, see my Family Child Care Legal and Insurance Guide.

Categories: Insurance, Legal, Legal & Insurance

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