From finding the perfect clients to childproofing your home before you open your doors, there’s a lot to think about when you’re planning to open a home daycare — don’t let insurance fall through the cracks.
We’ve got answers to some of the most common questions about insurance for home daycares. Specific coverages can vary by location and by insurer, so reach out to your broker to find out what kind of coverage is available to you.
Will my current home insurance policy cover my daycare, too?
A home daycare (no matter how small) is considered a business, and businesses typically aren’t covered by regular home insurance policies. Some insurance companies will allow you to add an endorsement to your existing home insurance policy to cover your daycare business, while others may require you to purchase a separate policy — and some companies won’t insure daycares at all, or may only insure daycares that meet specific requirements. Ask your broker about babysitting or daycare add-ons, but know that you may need to purchase a separate business policy (or even look for a new insurance company if your current provider won’t cover your daycare). Regardless, always tell your broker about your new home daycare, as failing to disclose information that could affect your home insurance could result in your provider cancelling your policy.
Why do I need insurance for my home daycare?
It’s (almost) all about liability. Whenever you’re inviting other people into your home — especially kids, who are more prone to accidents than adults — liability is your greatest risk. What if little Leo slips and breaks his ankle on your snowy sidewalk? What if your dog chews a hole in Diana’s designer diaper bag? While you might not think you need extra coverage for your physical space, it’s important to make sure you have enough liability coverage to protect you if you’re held responsible for an injury or damage to someone else’s property.
Some policies may also cover business property (like supplies you’ve purchased specifically for your home daycare) or loss of income if your home is damaged and you’re unable to provide care while your home is being repaired. This is important if your home daycare is a major source of income for your family.
How do local childcare laws and licensing affect my eligibility for insurance coverage?
You may be legally required to get a licence before you can care for other peoples’ children in your own home, so look into your local and provincial laws to find out what’s required. With or without a licence, it’s important to understand that your insurance company might have different rules than your local government (e.g., the maximum number of children you’re allowed to care for may be lower, or different home safety procedures may be required). Simply adhering to your local laws doesn’t necessarily guarantee your daycare will qualify for coverage.
Before you open any kind of home-based business, be sure to reach out to your broker to find out how your business plans will affect your eligibility for insurance and the cost of your coverage.
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