The Real Risks in Family Child Care

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The following incidents occurred in family child care homes. The amount of money shown is how much the child care provider’s business liability insurance policy paid out in claims.

  • A day care child pulled down a bottle warmer on top of another child: $525,000.
  • A three and a half month old child died of SIDS: $435,000.
  • An older child dropped an infant on the floor: $300,000.
  • A bookshelf fell on a child: $273,000.
  • A provider was accused of negligence in the death of a child: $240,000.
  • A two-year old was poisoned with E. Coli: $130,000.
  • A parent alleged that the provider’s son assaulted their daughter: $118,000.
  • A child fell and broke her leg: $90,000.
  • A child fell off monkey bars: $75,000.

Every family child care provider knows that caring for children in her home increases the risk of damage to property and injury to children. There is no way to eliminate these risks, but there are many things child care providers can do to reduce them.

The most effective way of reducing the risks of your business is to purchase professional business liability insurance. Unfortunately, only a small percentage of all licensed child care providers have taken this step.

What would have happened in the above cases if the child care provider did not have business liability insurance? It’s possible that she would have been stuck with a huge legal judgment against her that she probably could not afford to pay.

Some believe that it’s not worth purchasing business liability insurance because they don’t have enough personal assets to worry about a lawsuit. This is shortsighted thinking. Depending on the state you live in, you can still be in deep financial trouble, even if you don’t have much money to your name.

I have posted a Family Child Care Insurance Directory on the navigation bar at the top of my blog. This insurance directory is a listing of companies and agents that offer a variety of insurance policies to family child care providers. The information below was provided by the insurance company or individual. I am not recommending any individual or company on this list. I am making no promises about the insurance products they sell. If you know of a company or agent who should be added to this list, please contact me at tomcopeland@live.com; 651-280-5991.

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Categories: Insurance, Legal & Insurance

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7 replies

  1. Hi Tom, I am wondering does having the parents sign a insurance disclaimer protect us at all?noting in the disclaimer that if something should happen to the child while in care that the parent/gaurdian will be responsible for any expenses forthwith.thanks, shelley

  2. No, liability waivers are not going to protect you. Parents can’t give up their right to sue you (and the child could sue you).

  3. Wow! I can’t think of a more effective way to encourage providers to finally get insured. Those numbers are staggering.
    Thanks Tom!

  4. In Australia, if an Educator does not have PLI, her licence would be automatically revoked. she would be unable to operate. Current proof needs to be sent to the Department when lodging an initial application or renewal, its compulsory along with Child Protection, First Aid, Anaphylaxis, Asthma

  5. Do I want to include the landlord’s name on the policy if I’m renting, and they ask me to?
    Thank you!

  6. Yes. List the landlord as “an additional insured.” This will mean your landlord is covered under your policy, which is a good thing for you. It should cost nothing to do so, or very little.

  7. Every family child care provider knows that caring for children in her home increases the risk of damage to property and injury to children. There is no way to eliminate these risks, but there are many things child care providers can do to reduce them, that’s why parents should choose the best day care for their child.

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