Insurance Information

What is liability insurance?

Comprehensive general liability insurance covers negligence that happens both at your home and away from your home, such as on a field trip. Negligence is a legal term referring to an individual who was under legal duty to act with reasonable care and did not act with such care. The insurance company will either negotiate a settlement out of court or will defend you if you are sued.

Do I need liability insurance?

Certified family child care providers in Wisconsin are not required to carry liability insurance, but are required to notify parents in writing of their insurance coverage.

What does liability insurance cover?

Most comprehensive general liability policies cover four types of cases: bodily injury, damage to another's property, immediate medical relief at the time of the accident, and the legal cost of defending the child care provider in a lawsuit if the injured party decides to sue. Insurance agents often recommend a combined single limit of $300,000.

You may wish to consider additional coverage for the following:

  • Situations in which no one is at fault

  • Damage to your own property

  • Protection against personal injury (libel, slander or invasion of privacy)

  • Products liability (which includes the food that you serve)

  • Contractual liability (which includes legal contracts and leases)

  • Fire legal liability (in case you cause a fire in a building you lease or rent)

  • Employee liability

What doesn't liability insurance cover?

Most liability insurance policies contain five types of exclusions:

  • Intentional acts and corporal punishments

  • Physical and sexual abuse

  • Injuries resulting from automobiles, all-terrain vehicles or snowmobiles

  • Punitive damages (coverage for the costs of pain and suffering as assessed by the court)

  • The transfer of communicable diseases

  • Some policies may also exclude liability arising from domesticated animals, swimming pools, or times when the children are at the beach.

Is special coverage required when you provide transportation?

Some car insurance policies may not cover any business use of your vehicle. If you are using your vehicle to transport children in your care you may be required to purchase an endorsement to your personal policy or you may be required to purchase a commercial policy. It is important that you contact your insurance representative to clarify the details of your policy.

Please Note: The new WI Truth in Automobile Insurance law (as of 6/1/10) requires that all drivers have vehicle liability insurance.

What is the difference between liability and accident coverage?

Liability policies cover you only if you are negligent or if the accident is your fault. An accident policy covers medical costs when no one is at fault. In many cases, parents will have health insurance to cover medical expenses, but you may wish to purchase this additional coverage for accidents (some liability insurance includes coverage of medical expenses as part of the policy).

What are the options for certified providers?

If you are a county certified provider, you can probably get a rider on your existing renter or homeowner insurance to provide liability coverage. Such riders generally cost between $60 and $200 per year and generally offer $300,000 of coverage. Contact your insurance agent to find out.

In the past, some family day care providers have had their homeowner policies cancelled because they provided child care. In some cases, this was because the homeowner policies excluded business operations. If you have any questions about insurance cancellations or about liability, call the Office of the Commissioner of Insurance (608-266-3585). Do not try to hide the fact that you are providing child care from your insurance company because it could result in denial of any child care related claims.

What companies offer child care liabilty insurance?

  • Allstate

  • American Family

  • Farmers Insurance Group (homeowners policy only)

  • Rural Mutual (limited number of children covered)

  • Metropolitan

  • Secura

  • State Farm

*Insurance companies vary in the number of children they will cover as well as their rates.

Other organizations that offer assistance with insurance needs:

Know your insurance policy?

Whatever form of insurance coverage you purchase, it is always important that you completely understand your policy and know under what situations you are protected. Be sure to contact your insurance agent with any questions you may have about your policy.