TKW Consulting

Why, then, do only 20% of licensed family child providers have business liability insurance? The answer is probably threefold. First of all, many do not consider family child care as a business and therefore why do they need insurance. Secondly, a lot of providers who know better choose to ignore the issue, thinking that since they are licensed they are somehow inoculated and won't be held liable, or that accidents are unlikely because their home has been inspected. Finally, many providers think that insurance is just too expensive, and since they have never had a problem, it is a waste of money.

However, in the event of an accident, a lawsuit, or a criminal charge, uninsured providers can be wiped out financially and become unable to afford adequate criminal defense that may keep them out of jail. The equity in their home, their children's college fund, their savings and retirement investments, their future earnings greatly reduced — all these things can be affected by a legal judgment against them.

The Real Risks in Family Child Care
Here are several true stories in family child care:

• A day care child pulls down a bottle warmer on top of another child: $525,000
• A three and a half month old child dies of SIDS: $435,000
• An older child drops an infant on the floor: $300,000
• A bookshelf falls on a child: $273,000
• A provider is accused of negligence in the death of a child: $240,000
• A two-year old is poisoned with E. Coli: $130,000
• A parent alleges that the provider's son assaulted their daughter: $118,000
• A child falls and breaks her leg: $90,000
• A child falls off monkey bars: $75,000

In each case the provider's business liability insurance policy paid out these amounts to the parents of the child involved.Every family child care provider knows that caring for children in her home increases the risk of damage to property and injury to children. There is no way to eliminate these risks, but there are many things providers can do to reduce them. The most effective way of reducing the risks of your business is to purchase professional business liability insurance. Unfortunately, only a small percentage of all licensed providers have taken this step.