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Like other small
business owners, child care providers need life, health, and
disability insurance to protect them from losing their income.
Because they work with children, day care providers face unique
risks.
The greatest risk a day care provider faces is the injury or death
of a child or client. If an insurance company or a jury holds the
provider responsible, he or she could lose great amounts of money.
Providers should prepare for the risk now.
WHY YOU NEED INSURANCE COVERAGE
Child care providers risk three types of financial loss. If a
child is injured, a day care provider may have to pay the victim's
hospital and doctor bills. If there is a lawsuit, damages may be
awarded to the victim or the victim's family. In addition, a
provider could have to pay court costs and attorney fees.
Medical or accident insurance will pay for the victim's doctor and
hospital bills. Most liability policies include medical and
accident insurance. If your policy does not, you might need
separate coverage.
Liability insurance usually will pay for damages awarded by the
court. These policies also will pay the defense costs.
Some providers feel they do not need insurance because they have
never had an accident. Unfortunately, the future cannot be
predicted - an accident could occur at any time. However, a good
safety record may be helpful in buying insurance. Those people
with a history of accidents will probably pay more for insurance.
Sometimes providers try to substitute waivers signed by parents
for insurance. This is unwise. Legal advisers agree that waivers
will not hold up in court.
Most consumers are familiar with liability insurance since it is
an important part of homeowner's and automobile insurance. Yet,
virtually all homeowner's insurance policies and some personal
automobile insurance policies exclude coverage for claims related
to the operation of a home-based, small business. Many homeowner's
insurance policies exclude coverage for claims related to child
care. |
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Elaine Wilson
Parenting Specialist
Oklahoma State University |
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Reprinted with permission from the
National Network for Child Care - NNCC. Wilson, E. & Burns, M.
(1993). Liability insurance (HBB7-5). In Child care home.
Stillwater, OK: Oklahoma State University Cooperative Extension
Service. |
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