Operating a daycare center can be a rewarding and fulfilling experience, but before you make the decision to embark on this endeavor, there are a variety of things to consider. Of prime importance is business insurance — and evaluating your business risks is essential to getting the right insurance. Ranging from legal issues to keeping the children safe, there are many risks associated with operating a daycare center. Below are the primary risks of owning and operating a daycare center.
Health Risks
The first set of risks to contend with are the health risks of the children you take care of. It is also one of the most important things to keep in mind when operating a daycare center. Children are in your care, and it is your responsibility to provide a healthy environment. This includes providing healthy meals throughout the day, getting you and your staff CPR and First Aid training, keeping records of children’s allergies and other medical issues, and providing a clean and healthy environment. The health of the child also includes being sure you have a carbon monoxide and smoke detectors installed in your place of operation. This isn’t just recommended, but required for licensing purposes.
Safety Risks
The next significant risk of operating a daycare center and something you should keep in mind is the safety of the children. The environment not only needs to be healthy, but safe as well. This means storing chemicals in a locked cabinet, being sure all furniture and play equipment is intact and does not malfunction and overseeing all activities to prevent injury. If a child is injured, which can happen due to accidents, you are liable for it. Observe children in the daycare center at all times, test play equipment indoors and outdoors for safety purposes, and make sure you have working batteries in your smoke detector and a fire extinguisher on site. In addition, check with your state’s laws, as a fire alarm system may also be required. Be sure that you have the recommended number of exits as well, and conduct regular fire drills.
Enrollment and Admissions Risks
A business risk you might not be aware of is associated with the enrollment and admissions of children into your daycare center. By law, you can only have a certain number of children per daycare center, and a certain number of children based on the size of your home or daycare site. Get to know your state laws and understand you must always remain below full capacity. If you have too many kids, it could mean penalties for you. It is a good idea to start a waiting list if you reach full capacity, so that the spot can be filled quickly if a child leaves the daycare center.
Legal and Licensing Risks
Another big risk for a daycare center is the legal risks. These are only a risk if you don’t know the law or follow licensing requirements. Not only do you need to have all your ducks in a row when opening the center, but to maintain these qualities of standards while running your business. Before opening the daycare center, you must contact the small business administration in your city and get the list of rules and guidelines. They will have safety stipulations and other requirements in order to get licensed. You should never run a daycare center without a license. Additionally, be sure to keep very good records of all business operations and have parents fill out contracts for admission purposes.
Staffing Risks
The last risk you need to be aware of is that of your staff. You will most likely have at least one other daycare worker and you must run a background check on them. When taking care of children, staff should have a background check, references verified and a drug screening.
With these business risks in mind, mitigate them by purchasing day care center insurance. Your insurance policies should cover all your risks, such as property insurance, liability insurance and worker’s compensation.
