Significance

• Operating any business that involves children opens you to the risk of litigation. Even if you have parents sign a liability waiver before they put their children in your charge, you can still be at risk of being targeted by a lawsuit. The reasons for litigation against daycare are frequently unavoidable. They are often related to accidental injuries or even communicable illnesses. In other cases, an employee of the home daycare is held responsible for abusive behavior. An insurance plan can help to cover the risk of operating a home daycare.
  
  

Function

• Insurance policies that specifically cover home daycare centers often fill in the gaps of homeowner insurance policies. Homeowner insurance often specifically discounts any liabilities incurred from home daycare businesses. As running a business with proper insurance is integral to long term risk management, the costs of insuring the home-based daycare should be factored into all financial planning.
  
  

Effects

• Acquiring a home daycare insurance plan should be at the top of any new home daycare operator's list, but so should good risk management. Bad employees can be significant liability risks. Merely because someone has experience with children does not mean that they will be good daycare employees. Investigate their references thoroughly, asking in-depth questions about how they treat children. Ask if they have a history of yelling or hitting the children in their care.
  
  

Considerations

• Any transportation contractors should also be made aware of the additional liabilities involved in transporting children. Home daycare insurance often covers these liabilities, but even so, any litigation involving your business (insured or not) will likely make it almost impossible to continue working in childcare in the future. Discuss the legal responsibilities involved with everyone, and try to minimize the frequency of transportation to reduce overall risks.
  
  

Benefits

• Home daycare insurance may add to your costs, but it also allows you to make more coherent plans knowing that you are partially protected from risk. Insurance companies will often provide free legal advice along with suggestions for how to improve the safety practices of your home daycare business. They have a vested interest in giving you the best advice possible. Use them as an expert resource to help make your business the best that it can be.