Daycare Insurance: Costs, Coverage & Top Providers

This policy gives your business protection from third-party claims for bodily injury, property damage, and reputational harm. For example, if a child falls off a chair during snack time and gets hurt or a competitor claims your business slandered them on social media, you could file a claim on your general liability policy. Liability also protects the building structure in case you damage the rented space.

Because the financial risks associated with these claims can be significant, liability is a core policy every daycare owner should carry.

Some daycare centers provide transportation for children, either to and from their residence or from the daycare center to field trips. If your daycare has a dedicated vehicle transporting children, you’ll need commercial auto insurance. Commercial auto by law needs to carry liability, which will pay for property damage and bodily injury if you’re at fault for the accident.

Again, if you’re at fault, this bodily injury coverage extends to passengers in your vehicle. You should also consider first-party medical coverage and, depending on the value of the vehicle, collision and comprehensive.

As a first-party coverage, property insurance protects your assets from named peril claims like fire, theft, or wind. This is what you want to purchase if you own a building, equipment, or supplies.

It will insure your property on an actual cash basis or a replacement cost. The actual cash value deducts depreciation from the claim payment while the replacement value pays what it will cost to repair or replace the item.

Usually, insurers will combine liability and property damage into a single policy called a business owner’s policy (BOP). This gives you the advantage of having your two most important policies in one package and, sometimes, the premium is reduced when the coverages are combined.

The unfortunate reality is accusations of sexual misconduct are a risk daycare providers have to consider. This coverage may be included in your liability policy or available as an endorsement. Some providers will offer it as a stand-alone policy. Whether the charge has merit or not, if one is made, costs to your business will be immediate and potentially high. This form of liability helps with legal costs.

Most states require businesses with one employee or more to purchase workers’ compensation insurance. It provides wage replacement and helps with medical costs if an employee suffers an illness or injury while on the job. A lot of everyday activities, such as lifting children in and out of a stroller, can lead to an injury for an employee, so not only is this coverage most likely required but it also makes sense to have.

Claims can get costly fast, especially if litigation is involved. Policies come with set limits, and while your insurer will do whatever it can to resolve a claim within the limits, it’s sometimes impossible. Umbrella insurance is an excess coverage that provides additional limits in case you have a claim that goes sideways and needs additional coverage. Beyond the peace of mind, an umbrella may be necessary if you are renting a space for your daycare center and the landlord requires limits higher than your liability policy.

We were able to get one online quote from CoverWallet, and it recommended we call to discuss more options. The quote was for a general liability policy with a limit of $1 million per occurrence and $2 million aggregate. The cost for the policy was $800 due in full. If you could not pay the policy in full, a 10-month plan was available, but the overall price increased to $892.90.

Beyond quick quotes, CoverWallet has policy services. When you purchase a policy through it, you get access to an online account it calls My CoverWallet. This lets you manage your policy, check your claim status, and get instant access to certificates of liability (COI).

CoverWallet is owned by Aon, which is rated A (Excellent) by AM Best. The quoted policy was through Selective Insurance, another A (Excellent)-rated company.

For in-home daycare coverage, you can fill out an online application to start the quote process. For commercial coverage, you’ll need to speak with an independent agent.

Markel offers a general liability policy, which is an occurrence policy, with limits up to $1 million per occurrence and $3 million aggregate with separate limits for professional and general liability and abuse and molestation. All coverages carry the same limits.

Markel’s complaints are slightly higher than the national average with the National Association of Insurance Commissioner (NAIC). However, because it is a specialty insurer, meaning it writes policies for high-risk industries, higher complaints are not necessarily surprising.

You can file a claim 24/7, and it has its in-house claim team to help you with the loss. It also provides background screening services for current and future employees.

Markel has an A (Excellent) rating by AM Best.

Next offers a 10% discount if you pay the policy in full. It offered us one quote with three different general liability policy options: basic, premier, and deluxe. The price difference was negligible, but the limits increased dramatically.

• The basic policy offered a $500,000 limit for $60 monthly
• The premier had a limit of $1 million for $63.52 monthly
• The deluxe provided a $3 million limit of liability for $65.10 monthly

All policies came with abuse and molestation as well as errors and omissions (E&O) coverage with separate limits.

Overall, its complaints with NAIC are lower than the national average.

Since it is a digital insurance company, you can get a quote, purchase a policy, and manage it online. It offers iOS and Android apps, which allow you to manage your policy, file claims, and get instant COIs.

Although Next is a newer company, it has an A- (Excellent) rating from AM Best.

For a quote, you need to submit an online form. Within 24 business hours, a PHLY representative will follow up with you.

The liability policy it offers comes with limits of $1 million per occurrence and $3 million aggregate. It has the option for abuse and molestation coverage and corporal punishment.

Preschools are usually in a dedicated commercial space, and PHLY offers property coverage with coverage for contents and the building.

PHLY has lower than the national average for complaints with NAIC.

You can file a claim online or call 24/7. You can check the claim status, pay your bill, and get an instant COI online.

PHLY is owned by the global company Tokio Marine Holdings Inc. It has an A++ (Superior) rating from AM Best.

You can start a quote online and then finish with an agent or contact an independent agent.

American Family doesn’t provide specific information on limits or coverage, but it does offer general liability, property coverage, abuse and molestation, and corporal punishment liability with its home daycare package.

Complaints for homeowner’s and liability claims are lower than the national average with NAIC.

While you can’t get an online quote for this coverage, you can manage your policy and file a claim online. You can also call 24/7 to speak with someone.

For personal lines, American Family has an iOS and Android app, where you can manage your policy, make a payment, and submit a claim. Since this endorsement is for a homeowner’s policy, the app is another convenient option for you.

Founded in 1927, American Family has the established financial stability you want in an insurance company. It has an A (Excellent) rating with AM Best.