{"id":71910,"date":"2016-12-14T11:59:06","date_gmt":"2016-12-14T16:59:06","guid":{"rendered":"https:\/\/www.chcfinc.org\/clearinghouse\/?page_id=71910"},"modified":"2017-09-25T07:08:08","modified_gmt":"2017-09-25T11:08:08","slug":"insurance-legal","status":"publish","type":"page","link":"https:\/\/www.chcfinc.org\/clearinghouse\/manage-your-business\/insurance-legal\/","title":{"rendered":"Insurance & Legal"},"content":{"rendered":"

[vc_row type=”container” padding_top=”” padding_bottom=””][vc_column][vc_column_text]As a family child care provider, you\u00a0face multiple and unusual risks. \u00a0It is extremely important to protect yourself.<\/span><\/p>\n

The State of New York generally does not require\u00a0nor mandate business insurance for\u00a0family childcare providers. Consequently, many providers tend to view it as an unnecessary cash outlay.<\/span>
\n\"insurance-management\"<\/p>\n

Even if a provider forms a corporation or an LLC, in order to shield personal assets from business liabilities, he\/she still risks losing his\/her business. Furthermore, small tightly held businesses, which can have a greater difficulty of distinguishing between business and personal, are at greater risk of a court overruling their personal liability protections; particularly in egregious circumstances (negligence or fraud).<\/span><\/p>\n

Persons who may not own property or have other assets would also benefit from purchasing insurance. In some states, up to 50% of a spouse\u2019s wage may be garnished. If a provider leaves the childcare business\u00a0and takes another job, his\/her wages may be garnished. A provider may also be required to sell some assets, such as a second car, and personal items\u00a0<\/span><\/p>\n

Note: Liability waivers can\u2019t prevent parents from suing a childcare provider and judges won\u2019t enforce them. Also, the injured child could sue the provider later.<\/span><\/p>\n

A provider should visit his\/her state\u2019s office of insurance. State governments regulate the insurance industry and provide a number of services to consumers and small business owners.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row type=”container” padding_top=”” padding_bottom=””][vc_column][vc_tta_accordion active_section=”” collapsible_all=”true”][vc_tta_section title=”The Real Risks in Family Child Care & Why the Cost of Insurance is Worth It” tab_id=”1447814854272-8d078840-324c”][vc_column_text]It is shortsighted to think that having few personal assets won’t require the purchase of business liability insurance or that this will shield a provider from a lawsuit. Depending on the state a provider lives in, he\/she can still be in deep financial trouble, even if the provider doesn’t have much money to his\/her name.<\/span><\/p>\n

Should a court award a parent or some other business-related person a significant sum of that a provider is unable to pay, they may be able to put a lien on the provider’s assets (such as the home), depending on the state’s laws.<\/span><\/p>\n

Usually, a court judgment against an individual will last for ten years. Liens against a home can have detrimental long term effects. Any inheritance\u00a0received may be taken.<\/span><\/p>\n

http:\/\/tomcopelandblog.com\/the-real-risks-in-family-child-care<\/span><\/a><\/p>\n

Tom Copeland, Family Child Care Business and Tax Specialist recommends, \u201cthat you get as much insurance as you can afford. Ideally, you should have $1 million per occurrence (maximum payout for each incident) and $3 million aggregate (maximum payout for the life of the policy). You want to ensure that your policy provides coverage for professional liability, child sexual abuse, and medical expenses.\u201d<\/span><\/p>\n

A provider can deduct 100% of this cost as a business expense.<\/b><\/p>\n

Note: Liability waivers can\u2019t prevent parents from suing a provider and judges won\u2019t enforce them. Also, the injured child could sue a provider later.<\/span><\/i><\/p>\n

Resources and links:<\/span><\/p>\n