Table of Contents |
Risk Management and Insurance |
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Types of Regulated Child Care in New York State |
Risk ManagementBusiness risk falls into three main categories: 1) business risks, such as damage to property, 2) personal risks related to health and injury, 3) legal risks, including broach of contracts or things that put you at a risk of being sued. Business risk is ultimately borne by the business owner(s) or the corporation. There are many ways for business owners to limit risk and personal liability. It is important to develop a risk management plan that specifies on-going maintenance of equipment and the environment, and identifies when (and which) safety drills are conducted and what you will do in case of emergency. While the business’ legal structure can serve to limit personal liability, not all accidents can be prevented and liability insurance helps to transfer liability when it comes to the unexpected. Business policies, procedures and contracts are also a part of risk management. Creating a Risk Management PlanCreate a risk management plan that includes required safety drills, on-going inspection of toys and maintenance of the facility and equipment. In their article, Ready or Not? Evaluating Your Family Childcare Risk Management Plan (RMP), the McCormick Center for Early Childhood Leadership, includes steps for evaluating a risk management plan and a Risk Summary and Coverage Checklist for preschools. In addition to monitoring the environment and minimizing slips and falls, minimizing risk requires complying with federal and state requirements for the child care industry and having insurance to help cover the unexpected. If there are employees, it is important that the business follows labor and employer responsibilities re: immigration, occupational safety, wages, hours and taxation. Federal and State RequirementsBusiness regulations for New York State are outlined in the Starting a Small Business in New York State. Child Care Licensing RegulationsChild care businesses in New York must adhere to the licensing requirements and regulations put forth by the Office of Children and Family Services. Licensing and registration requirements require confidentiality of child information, disallow corporal punishment, indicate that child care staff are mandated reporters of suspected or known child abuse and neglect. There are also health and safety training and requirements, and specifics regarding the administration of medication to children in care. Child records and emergency information must be kept up to date and the business must have emergency plan, evacuation diagrams and practice, and document, regular emergency drills. Discrimination is IllegalFederal and New York State Human Rights Law taken together forbid discrimination on the basis of age, race creed, color, national origin, sexual orientation, military status, sex, disability, pregnancy-related condition, domestic violence victim status, genetic predisposition or carrier status, familial status or marital status. Federal law also requires that women and men receive equal pay for the equal work in the same workplace and prohibits employers from workplace harassment. Further, licensing regulations also state that child care services must not be refused to a child solely on the basis of developmental delay or disability or having been diagnosed as having human immunodeficiency virus (HIV), HIV-related illness or acquired immune deficiency syndrome (AIDS). Whenever possible, reasonable modifications are expected to be made to accommodate children with special needs. Americans with Disabilities Act (ADA)Child care businesses must provide any medication, treatment or remedy as required under the provisions of the American’s with Disabilities Act (ADA) and be sure to provide toys and equipment that promotes the cognitive, educational, social, cultural, physical, emotional, language and recreational development and meets the needs of all children in care. Learn more about the ADA from the U.S. Department of Justice, Civil Rights Division’s technical assistance page at ADA.gov. Business InsuranceChild care regulations in New York State do not require business owners to carry insurance, regardless insurance is an important component of any risk mitigation plan. While business structure provides some protection from liability, purchasing insurance helps transfer the liability and reduce any potential costs incurred by the business or business owner. Insurance can help to cover costs due to injury or loss related to crime or damage to property or equipment. Slips and falls are a common cause of injuries experienced by customers and employees of the most common cause of workers compensation and general liability claims. Back injuries are also common for child care workers who lift children and equipment throughout their work day. Homeowner’s and renters who operate a family or group family child care program will probably need coverage specifically for the child care business. If the home-owners policy covers child care, be sure the insurance company knows child care is being provided rather than surprising them with any claims – and perhaps yourself, by not being covered after all. General Liability InsuranceGeneral liability insurance helps to cover costs, protecting the business and/or business owner if sued over a particular incident or outcome and can help pay for attorney and settlement fees. It protects the business from liability for property damages and injuries, including emotional distress, caused to staff and employees, a child, parent or other visitor who is not an employee. General liability insurance should cover libel, slander, and copyright infringement, but it doesn’t cover professional errors or negligence.
Recommended Insurance Coverage Limits Family and Group Family Child Care
Recommended Coverage Limits for Centers and School-age Programs
Employer Insurance ObligationsEmployer insurance obligations have been discussed prior, but to summarize, obligations include Unemployment Insurance, Worker’s Compensation, Disability Insurance and New York State Paid Family Leave. Additionally, employers may choose to offer health insurance or a flexible spending account benefit for employees to purchase their own medical insurance. Learn more about business insurance from New York State and if the business doesn’t offer health care coverage, help employees find medical insurance through the New York State Health Plan Marketplace. Employment Practices Liability InsuranceWe might think it won’t happen to me, but so many people use the legal system against each other and their place of employment. Employment practices liability insurance can help pay for legal defense costs and provide protection from claims such as harassment, wrongful termination or discrimination by current or prior employees. Directors and Officers and/or Management Liability InsuranceBusinesses that operate under a board of directors will want to purchase directors and officer’s liability insurance. This insurance protects board members or officers from personal liability for business losses if they are sued by any employee, customer, vendor or other party related to the business. Automobile InsuranceCommercial automobile insurance will be required for centers and school-age child care businesses to transport children. Family and group family providers may be able to secure coverage for transporting children under their personal automobile insurance. Commercial automobile insurance can be costly and programs often choose to ask parents to support transporting children for field trips. It is common to request verification that personal automobile insurance meets minimum limits established by the business. If a home-based child care program charges for transportation, commercial auto insurance will be required to provide protection for anyone driving in relation to business.
Other insurance
Additional Resources
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Building Access to Child Care Project (BACC) and Early Childhood Business Alliance (ECBA) | ||
Early Childhood Career Development | ||
NYS Child Care Licensing Process | ||
Creating a Business Plan | ||
Business Structure | ||
Risk Management and Insurance | ||
Financial Management and Record Keeping | ||
Taxes | ||
Child and Adult Care Food Program (CACFP) | ||
Marketing | ||
Curriculum Planning | ||
Program and Employment Records and Forms | ||
Working with Families: Communication, Contracts and Help Paying for Child Care | ||
Caregiver Qualifications, Training and Professional Development Requirements | ||
Quality Improvement | ||
Professional Organizations | ||
Frequently Asked Questions – FAQs | ||
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