Daycare Tax Tips

Protect Yourself from Calamity

Get adequate liability, workers' comp and vehicle coverage

The husband of a family child care provider writes:

>I was reading past newsletters and in 2007 you discussed the necessity to have workers comp here in CA. Is that still the case and did you get any good responses from providers on where/cost of coverage? That is an area that my wife is lacking in with her business and it's gotten me worried.

Thanks for contacting me. Please refer to my updated web post covering workers' compensation insurance. The leads I have are listed at the end of the article. If your wife has a helper/employee, this is is certainly something to be concerned about.

It seems that liabilities loom in many areas and we all need protection for those rare disastrous situations. You need good child care-specific liability insurance (at least $1 million per occurrence/$2 million aggregate), workers' comp insurance, and (if your wife transports kids) commercial auto coverage.

That last one was emphasized by Tom Copeland at a workshop I attended this month. He pointed out that most personal auto policies do not cover transporting day care children, which generally requires more expensive commercial insurance. Tom told of a provider in Minnesota who was in a state of financial ruin following a serious accident with kids in the car and urges child care providers to ask their insurance agent about this. If the agent says you are covered for transporting children, make sure you get it in writing!

Posted on 2011-02-16 07:17:07