What Does Childcare Insurance Cover

If you’re in the business of childcare, it’s important to make sure you’ve got the right protection. From protecting your staff, the children, your premise and equipment down to your reputation, it’s essential to make sure you’ve got all your bases covered with the right insurance.

Chances are you’re probably already aware of just how quickly a minor incident can deteriorate into a major issue and without the right protection you could be left high and dry.

Why do childcare providers need insurance?

Whether you’re a nanny, a family day care operator or you run a large long day care centre, there are a number of risks associated with providing early childhood education and care. 

Children can be a joy to work with but they can also be incredibly unpredictable and small issues can quickly develop into major problems that could put your livelihood at risk. No matter how careful you are, the reality is that accidents happen, which is why it’s essential to have the right childcare insurance coverage in place. Beyond dealing with children daily, there are a number of other risks associated with working in childcare that should be accounted for when choosing childcare insurance. If you employ others as part of your childcare service, you’re legally obligated to hold insurance that protects staff against work-related injuries or illness.

Childcare insurance can also cover damage or loss to your work premise and the contents, items and equipment stored at your facilities. If you operate your childcare business out of your home or a purpose-built building, could you afford to rebuild and replace all the belongings and equipment if they were lost, damaged or destroyed? Most people couldn’t manage such a sizeable financial outlay, so taking out childcare insurance cover can help to cover these costs and mitigate the risks your business is subject to. 

Whether one of your staff members or a child in your care is injured, your centre was the target of theft or fire or your equipment was damaged accidentally, there are a number of instances where it pays to have childcare insurance. 

Depending on the type of childcare service that you offer, you may need to consider different types of childcare insurance but here are some of the main covers to look out for. 

What to look for in childcare insurance

Whether you choose a single policy that covers all your bases or you need to take out several policies that are tailored to your specific needs, there are a few key types of insurance coverage that are essential for childcare. Working in childcare comes with its own set of unique risks, so it’s important to find a childcare insurance policy that caters to your needs.

Professional indemnity insurance

Professional indemnity insurance is designed for professionals who provide advice or services to their customers or clients. This cover is intended to protect you against claims from customers or third parties that allege that they have experienced loss as a result of you performing your professional services.

Public liability insurance

Public liability insurance provides cover for your legal liability if third party property damage and/or bodily injury arises as a result of your centre’s activities.

Childcare services that operate under the National Quality Framework (NQF), including kindergarten, long day care, outside school hours care and family day care are required by law to hold either:

• a current insurance policy that provides adequate cover for the service against public liability, with a minimum cover of $10 million, or 

• an insurance policy or indemnity against public liability provided for the service by a state or territory government.

When it comes to family day care specifically, approved providers of Family Day Care services must also ensure that any educator engaged by their service also holds their own insurance against public liability with a minimum cover of $10 million.

Workers compensation insurance

If you employ staff as part of your childcare service, you must provide workers compensation insurance to protect them against work-related illness and injury. Workers compensation requirements differ across the different states and territories. Ultimately, workers comp provides payments to employees to cover their wages while they're unable to work as well as medical expenses and rehabilitation for work-related incidents.

Personal accident insurance

If you have people who help at your childcare service that aren’t technically considered employees (EG. volunteers, work experience students or committee members) they won’t be covered by workers compensation insurance should they suffer an injury or illness on the job. In this instance, it can be worth taking out personal accident insurance so you’re not left out of pocket if something were to happen.  

Property insurance

Property insurance is designed to provide protection for your building/s and the items located at your premises. This can include things like contents, toys, outdoor equipment, furniture and even money if they are stolen or damaged.

Business interruption insurance

If you’re unable to operate your business as a result of a property insurance claim, business interruption cover can help to protect against the loss of profit as a result of the claim.

Tips for managing your childcare insurance

It’s essential to take out the right insurance coverage, otherwise you could be left out of pocket. Here are some tips for getting the most out of your policy:

1. Review your insurance regularly: while it can be difficult to find the time to review your childcare insurance, it can make a huge difference over the long run. From helping you to save money to holding the correct type and level of coverage, it’s well worth regularly reviewing your policy.

2. Get to know your policy: while insurance policies are designed to protect you against loss and damage, you as the policyholder have certain obligations that you must meet. From notifying the insurer of incidents in a timely manner to keeping them abreast of updates and changes to your business, it pays to get to know your policy and your obligations or you could find yourself without coverage when you most need it. 

3. Identify your risks: depending on the type of childcare service you provide, you may be exposed to different risks as compared to another childcare provider. Identifying your risks is the first step in finding the right cover. Once you know your risks you’ll be better equipt to figure out what cover you need.

4. Make sure you have adequate coverage: taking out the right insurance is one thing, but making sure you have the right level of coverage is another story. Without enough cover you could be left to cover the difference between your payout and the actual cost of the repair or replacement.

Regardless of the type of childcare service you operate, having the right childcare insurance coverage is essential for protecting you, your business, your potential employees and the children in your care. If you need help sourcing the right childcare insurance for your business, we suggest talking to a qualified insurance broker.