Business insurance can be confusing in general, but getting specific about coverages that are important to the childcare and early education industry can be even more tricky. The best place to start is with General Liability – the coverage that is most commonly required for operating a business whether by contract or law.
General Liability policies cover your business if a claim is made resulting from third-party bodily injury and property damage, or personal and advertising injury. The following examples are potential claims scenarios that could be covered under these coverages:
- A child in your care slips in a puddle of spilled water that was not cleaned up promptly, then falls and breaks their arm. The child’s parents could file a claim against your business for bodily injury since the business could be deemed a negligent party in the case. This coverage could also pay for any damage to the property of the claimant arising from the incident.
- In your advertising, you accidentally use copyrighted or trademarked material, resulting in a lawsuit from the third-party company. Your personal and advertising injury coverage could help pay on this claim.
- You decide to rearrange the furniture in your building. In the process of doing so, you scratch the floors and notice that the furniture did damage to the walls. If your landlord decides to sue you for the damages, your General Liability coverage could pay out under the “Damage to Premises Rented to You Limit”.
- An employee of yours posts something negative on social media about a competitor that ends up getting a lot of local attention. If the competitor feels like this has caused harm to their business, they could sue for slander. Your Personal and Advertising Injury coverage could pay for the lawsuit in this instance.
General liability policies vary from company to company based on the additional coverages that they offer within their childcare programs, while the General Liability limits are usually the same. A standard Generally Liability policy will usually contain the following limits:
- Each Occurrence Limit - $1,000,000
- General Aggregate Limit - $2,000,000
- Personal and Advertising Injury Limit - $1,000,000
- Damage to Premises Rented to You Limit - $100,000 (Any One Premises)
- Medical Expense Limit - $10,000 (Any One Person)
The amounts of these coverages may vary, but the Occurrence limit is basically the maximum amount that the insurance company could pay out for any one claim. The General Aggregate amount is the maximum they could pay out for all claims combined during a policy term.
What differentiates these policies from one insurance carrier to another are usually the additional coverages that can be added or are automatically included as part of the insurance program. Some of these additional coverages are Accident and Medical Liability, Professional Liability, Employment Practices Liability, Cyber Liability, and others that I will explain in depth in future posts.
If you’re not sure what additional coverages are available on your insurance program, be sure to ask your agent to present those options for you. Paying the additional premium for them now could save you in the long run.