Starting a daycare as a home-based business can be a great way to earn money while working from home, especially when you have little ones of your own.
As with any small business involving children, you will need to purchase insurance to protect yourself and the children in case of any accidents that happen during operating hours (*knock on a toy wooden block that there are none).
Below are a few frequently asked questions regarding home daycare insurance.
WILL MY REGULAR HOME INSURANCE COVER MY HOME DAYCARE?
Unfortunately, home childcare businesses are not always covered by regular home insurance.
There are a few types of insurance that are highly recommended for home daycare businesses and others that are suggested but they depend on several factors.
These factors can include:
- Whether or not you hire employees
- If you are operating the daycare out of your own home or someone else’s.
You will likely need additional insurance protection, specifically pertaining to your property if you operate out of your own home as opposed to someone else’s. If the latter is the case, it will be the homeowner’s responsibility to make sure they have the proper home insurance, while you take care of the small business insurance needs.
Some insurance companies will have specific insurance products for daycare centers whereas others will guide you through choosing the best options to build a custom insurance policy that is best for your daycare.
If you use a vehicle to transport children in your care, you will need to make sure that commercial auto insurance is also covered under the proper ratings of your auto policy, as regular auto insurance may not cover the children in your vehicle that are not your own.
DOES MY HOME DAYCARE NEED TO BE LICENSED?
In Ontario, a home-based childcare centre does not need to be licensed if there are 5 or fewer children under the age of 13, including the provider’s children under 4 years, being cared for.
However, there can only be a maximum of 3 children under the age of 2 at one time.
The difference between a licensed and unlicensed centre is that a licensed centre has strict regulations passed down by the government and is inspected yearly to ensure that the regulations are being followed.
The insurance requirements are the same for both licensed and unlicensed home daycares.
WHAT DOES HOME DAYCARE INSURANCE COVER?
According to Insurdinary, home daycare insurance would protect the business and homeowner in case of an accident while the children they are caring for are present and provide protection against any potential lawsuits and claims of professional negligence.
Home daycare insurance may also protect the equipment that you use to run your business in case of natural disasters such as a flood or tornado.
It is important to note that this insurance does not cover property damage to the home outside of the area used for the daycare. It is important to ensure that the homeowner is aware of this and takes the proper precautions to ensure the rest of their home is properly ensured.
HOW MUCH DOES HOME DAYCARE INSURANCE COST?
Home daycare insurance premiums can start at $120 per year and increase from there depending on the different types of insurance that you add to your policy as well as the needs of your daycare.
Other factors that could affect your insurance rates are:
- The size and location of your home centres
- Projected revenues
- Services that will be provided by your daycare
Western Financial Group lists a few policies that you will need to start with:
- Commercial general liability insurance
- Property damage and bodily injury coverage
- Business income coverage
There are also optional coverages that you can add to your policy such as abuse liability, critical illness, disability and more.
Starting a home childcare centre can be a fulfilling way to generate income while staying home with young ones with the bonus of potentially being able to control the hours that you work.
It is really important to make sure that you and the children are protected in case of unfortunate and unexpected incidents that can occur.
There are a lot of factors to consider when choosing the correct insurance for your childcare centre and your insurance agent can help you make the right decision for you and your home daycare centre.
Childcare is a very rewarding vocation for those who are forever young at heart.
Erie Mutual Insurance proudly serves the commercial insurance, farm insurance, home insurance and auto insurance needs of members throughout Southern Ontario including Haldimand, Niagara and Hamilton.
Please don’t hesitate to contact us with any questions you may have about this or any other topic related to your insurance.
