Are You Covered When You Get Into Your Vehicle?
The biggest financial risk you can take as a family child care provider is to get into a vehicle with children in your care.
That's because of the possibility of multiple injuries, property damage and lawsuits.
A family child care provider in Minnesota was transporting four children in her van when it caught fire on the freeway. Two children died. Because she didn't have adequate car insurance she is out of business and has hundreds of thousands of dollars of claims against her she cannot pay.
Your homeowners and business liability insurance policies will not protect you when you are in your vehicle.If you use your car only "occasionally" for your business you may not need more car insurance than you currently have. If you use your car "regularly" for your business you may need commercial car insurance.
It's imperative that you find out whether your current car insurance policy covers you. This means contacting your car insurance agent and describing in detail how you use your car in your business: Do you transport children daily, weekly, monthly, rarely, never? Do you go to the bank, training workshops, grocery stores, hardware stores, etc.?
After describing all the ways you use your car for your business, ask the question, "Am I covered in all of these situations?"
If your insurance agent says your current policy covers you, ask them to put it in writing. If you don't have it in writing, it's likely you are not covered.
How much coverage?
You want bodily injury and property damage coverage of at least $500,000 for each accident. You can also purchase limits of $250,000 Bodily Injury for each person/$500,000 Bodily Injury for each Occurrence and $250,000 Property Damage.You want uninsured motorist bodily injury coverage of at least $500,000 for each person and each accident. Or split the limits as shown above.
You want under-insured motorist bodily injury coverage of at least $500,000 for each person and each accident. Or split the limits as shown above.
You want a higher deductible ($1,000) to help reduce the cost of the insurance policy.
Umbrella insurance
Some providers purchase an umbrella insurance policy that raises the coverage limits on their homeowners and car insurance policies. Before purchasing an umbrella policy, find out if this will increase the coverage when there is an accident during a business trip.
To find a car insurance policy that covers your business, see my family child care insurance directory.
Transport children?
If you regularly transport children you may find that you must purchase commercial car insurance to be adequately covered. The cost of such insurance can vary a lot. Some family child care providers have concluded that they can't afford the insurance and stop transporting children.
You may find it is cheaper to use public transportation or hire a van when transporting children.
Summary
Most providers have not contacted their insurance agent to see if their car insurance covers them when they use their vehicle for their business. Many insurance companies will not cover child care providers, so you need to discuss this with your insurance agent.
Conclusion: Do not get into a vehicle unless you are adequately insured and have it in writing!
Thanks to insurance agent Debe Marofsky from Affiliated Insurance Services in Plymouth, Minnesota.
Tom Copeland - www.tomcopelandblog.com
Image credit: https://www.quoteinspector.com/what-is-comprehensive-coverage-on-a-car-insurance-policy/
For more about car insurance and other business insurance policies, see my book Family Child Care Legal & Insurance Guide.
