As president of KBD, Curtis aims to simplify insurance for his clients. He’s helped lead KBD to become one of Canada’s fastest 400 growing companies according to the Globe & Mail.
Published on:
Curious about commercial daycare insurance costs in Canada and how they impact your business’ budget? Here, we’re explaining daycare insurance costs, including which factors can affect your premiums.
Daycare insurance costs can take a big dent out of your business’ budget, so knowing what factors affect your premiums is an important part of planning ahead.
This is especially key if you’re in the process of choosing a commercial daycare site, or renovating your daycare space.
That considered, if you’re ready to explore your coverage options, we can assist with that too.
Click below to get a daycare insurance quote, or give us a call directly.
Now, let’s get into the details!
Skip ahead to find what you need:
- What is daycare insurance?
- How much is daycare insurance?
- What does daycare insurance cover?
- What factors affect daycare insurance costs?
- What are the main insurance coverages that daycares should purchase?
- How do I get commercial daycare insurance for my childcare centre?
- What’s the difference between a home daycare and a commercial daycare?
- What liabilities are associated with daycare centres?
What is daycare insurance?
Running a daycare – or any business for that matter – comes with certain risks.
Daycare insurance is a specialized set of coverages designed to protect daycare operators from the potential liabilities associated with running a childcare business.
This insurance policy typically includes several key components including general and professional liability coverages and property coverage.
As a daycare operator, you should work closely with an insurance broker to tailor a policy that meets your unique needs to ensure that you’re properly covered.
Need a daycare insurance quote?
If you’re based in the provinces of Quebec or Ontario, give us a call.
Our team of experienced commercial insurance brokers will be happy to help.
How much is daycare insurance?
Daycare insurance coverage is tailored to the specific needs of your daycare centre, so the cost will vary depending on several factors.
On average, small daycare operations might pay between $500 to $1,500 per year for a basic policy.
However, this cost can increase significantly based on the size of the daycare, the number of children enrolled, and the specific coverages required.
- Commercial General Liability (CGL) coverage, which protects against claims of injury or property damage, is usually the most significant portion of the premium. The cost for CGL can range from $250 to $1,000 annually.
- Professional Liability Insurance, which covers claims of negligence or failure to perform duties properly, might add an additional $300 to $800 per year.
- Property Insurance premiums depend on the value of the physical assets of the daycare, such as the building, furniture, and equipment. This can range from $200 to $1,200 annually, depending on the coverage limits.
- Abuse Liability Coverage is also essential for daycare providers. This can add another $200 to $600 per year, depending on the insurer and the specific risks involved.
Overall, daycare operators should expect to spend between $1,000 to $3,500 or more per year on a comprehensive insurance package.
Working with an insurance broker familiar with the childcare industry in Canada is essential to ensure you get the right coverage at a competitive price.
At KBD, we specialize in insurance coverage for commercial daycare centres.
If you’re based in Ontario or Quebec, we can help you find the right coverage at the best rate.
Need daycare insurance?
What does daycare insurance cover?
Daycare insurance in Canada offers broad protection for daycare operators, and covers various risks associated with managing a childcare business.
As we touched on above, daycare insurance providers should have these three coverages in place:
- Commercial general liability (CGL): Covers legal costs and compensation if a child is injured or property is damaged on daycare premises. For instance, if a child is hurt in a playground accident, CGL would cover medical expenses and any legal claims.
- Professional liability insurance: Protects against claims of negligence or failure to provide adequate care. For example, if a parent claims their child was not properly supervised, this coverage would help with legal fees and settlements.
- Property insurance: Protects the daycare’s physical assets, including the building, furniture, and equipment, from risks like fire, theft, or vandalism. Say a fire damages the daycare; property insurance would cover repair or replacement costs.
Plus, it’s smart to have comprehensive coverage. Many daycare insurance policies also include:
- Abuse liability Coverage: This is essential coverage against allegations of abuse. This coverage is important for daycares because even unfounded allegations can result in significant legal costs.
- Business interruption insurance: This provides income replacement if the daycare has to temporarily close due to a covered event, such as a fire. This protects the business and helps it to recover financially during the downtime.
These coverages are tailored to meet the unique needs of each daycare centre.
We’ll break down each type of coverage in more detail below.
Need daycare insurance coverage?
What factors affect daycare insurance costs?
There are quite a few!
By considering these factors, insurers can assess the level of risk associated with your daycare operations and determine the appropriate premium to charge.
Here’s a look at the key factors influencing daycare insurance costs:
- Size of the daycare: Larger daycares with more children and staff generally have higher insurance costs due to the increased risk of accidents and claims. For example, a daycare with 50 children will likely pay more for insurance than one with 10 children.
- Location: The geographic location of your daycare can impact insurance costs. Urban areas or regions with higher crime rates may lead to higher premiums. Case in point: A daycare in a busy downtown area may face higher premiums than one in a rural setting.
- Type of facility: Operating from a home-based daycare vs. a commercial building affects the cost. Commercial properties usually require more comprehensive coverage, leading to higher premiums. So, a daycare run from a dedicated commercial building will typically have higher insurance costs than a home-based operation.
- Coverage levels: The extent and type of coverage you choose directly influences the cost. Higher coverage limits and additional protections increase premiums. As an example, opting for $2 million in liability coverage will cost more than opting for $1 million in coverage.
- Claims history: A history of previous claims, whether related to property damage, liability, or abuse allegations, can increase your insurance costs. Insurers view a history of claims as an indicator of higher risk. Put simply, if your daycare has had previous liability claims, expect higher premiums.
- Staff qualifications and training: Well-trained and qualified staff reduce the risk of accidents, potentially lowering insurance costs. For example, a daycare with staff that’s certified in first aid and child care may benefit from reduced premiums. Always check with your insurance provider about the different measures you can put in place.
Overall, understanding these factors can help you to manage costs and secure the right coverage for your daycare.
Need daycare insurance coverage?
Give us a call.
What are the main insurance coverages that daycares should purchase?
Daycares in Canada should consider a few key insurance coverages to protect against the unique risks associated with childcare.
In general, here are the foundational insurance coverages that daycares should consider:
- Commercial general liability: This covers legal expenses and compensation if a child is injured or property is damaged while in your care. For instance, if a child suffers an injury on your premises and the parents sue, CGL insurance would cover the legal costs and any settlements or judgements.
- Professional liability insurance: Also known as errors and omissions insurance, this protects against claims related to professional negligence. For example, if a parent claims that your staff didn’t provide adequate supervision, and their child gets hurt, this insurance would help cover legal fees and damages.
- Property insurance: This protects the physical assets of your daycare, including the building, playground equipment and furniture, against risks like fire, theft, or vandalism.
These coverages form the foundation of a comprehensive insurance plan for daycares, mitigating financial risks to ensure long-term operational stability.
As we mentioned above, you can also have additional coverages added to your policy if needed.
It’s best to speak with an experienced insurance provider like KBD about the exact type of coverages that make sense for your daycare.
Need daycare insurance coverage?
We’re happy to help.
How do I get commercial daycare insurance for my childcare centre?
Simple! You can give the commercial insurance brokers at KBD a call.
If you’re based in Ontario or Quebec, we can get you multiple quotes to find you the best coverage and price.
In general, the process to get commercial daycare insurance for your childcare centre in Canada looks like this:
- Assess your needs: Identify necessary coverages and amounts like general liability, professional liability, and property insurance.
- Research providers: Look for insurers specializing in daycare coverage. At KBD, we provide daycare insurance to commercial centres.
- Gather information: Prepare the details about your daycare, including its size, location, and number of children as the insurer will require this information.
- Request quotes: Obtain and compare quotes from multiple insurers. A broker like KBD can speed up this process by getting multiple quotes at once.
- Review and purchase: Choose an insurance policy and provider that fits your needs and complete the application process.
Having the right insurance coverage in place will protect your daycare from various risks – that way, you can operate day-today with peace of mind.
Need daycare insurance coverage?
What’s the difference between a home and a commercial daycare centre?
There are several differences between a home and a commercial daycare centre in Canada.
Where you run your daycare also affects the type of insurance coverage you’ll need.
- The location: Home daycares operate from a residential property, while commercial daycares are located in a dedicated commercial or business facility. If you operate a home-based daycare centre, you may need to include additional coverages to your home insurance policy rather than purchasing a commercial insurance policy. Get in touch with our home insurance brokers here if you have questions.
- Regulations: Home daycare centers are typically subject to local residential zoning laws. On the other hand, commercial daycares must comply with commercial zoning and health and safety regulations.
- Insurance costs: Home daycares generally have lower costs due to reduced liability and property risks. Commercial daycare centres on the other hand have higher premiums due to increased risk and coverage requirements.
Understanding these differences helps in choosing the right insurance and meeting regulatory requirements.
Need a daycare insurance quote?
What liabilities are associated with daycare centres?
Running any kind of business comes with risks, and daycare centers are no different.
Daycares face potential liabilities that can impact their operations and financial stability.
The potential risks of running a daycare include:
- Injury liability: The risks associated with accidents or injuries to children, such as slips, falls, or playground incidents. Daycare centers must ensure a safe environment to minimize these risks.
- Negligence claims: Allegations of inadequate supervision or care pose a potential risk. If a child suffers harm due to perceived neglect or insufficient attention, the daycare could face legal action.
- Property damage: Liability for damage to the daycare’s property, like the building or equipment, and potentially to others’ property. This includes risks from accidents or events like fires or vandalism.
- Abuse allegations: Any serious claims and accusations can lead to significant legal costs and reputational damage.
- Employment issues: This includes risks related to staff injuries, disputes, or claims of unfair treatment. Having proper workplace safety measures and clear policies can help manage this.
Having adequate insurance and adhering to safety and operational standards is essential for managing these potential risks effectively.
Need insurance coverage for your daycare?
Wrap-up
Put simply, the cost of daycare insurance costs in Canada depends on several factors.
In general, you can expect to pay several hundreds to several thousands of dollars a year.
Before you dive into securing insurance for your childcare centre, make sure you’ve ticked all the boxes:
- Assess your daycare’s specific coverage needs
- Research and compare quotes from different providers
- Understand the factors that affect your premium
- Stay informed about the various types of coverage available
Have questions about commercial daycare insurance?
If you’re looking for the best options for your daycare centre, don’t hesitate to contact us.
We’re here to help you navigate the insurance landscape and ensure you get the coverage you need to protect your daycare.
Give us a call to request a quote. PS: Are you following KBD on Instagram, YouTube and Tiktok? We’re up to some cool stuff.