Professional Liability Insurance for Daycares

This page covers professional liability in depth. For an overview of every liability coverage a childcare business uses, see daycare liability insurance.

Professional liability insurance for daycares addresses a type of claim that general liability was not built for: the allegation that your program did not provide care the way it should have. For a childcare business, supervision, feeding, napping, and teaching are the work itself, so these claims go to the heart of what you do. Policy definitions and coverage vary by insurer.

How professional liability differs from general liability

General liability is organized around bodily injury and property damage. It responds when someone outside the business says your premises or operations physically hurt them or damaged their property: a parent slips on the front steps, or a ball breaks a neighbor's window.

Professional liability looks at a different question. Instead of focusing on a physical accident, it addresses claims arising from the care, supervision, instruction, or other professional services your program provides. The allegation is about a decision or a failure to act, such as not following a care plan or not supervising a group closely enough.

Supervision and care decisions behind these claims

The examples below are illustrative hypotheticals, not real claims. They show the kinds of allegations professional liability may be designed to address. Whether any policy responds depends on its wording and the facts.

• Supervision. A family alleges that too few staff were watching the playground when a child left the play area unnoticed.
• Medication. A parent claims a prescribed dose was given at the wrong time or skipped on a busy afternoon.
• Allergies. A child's documented allergy is missed during a classroom celebration, and the family questions staff training.
• Nap practices. Parents allege that safe sleep practices in the infant room were not followed.
• Release to authorized adults. A child is released at pickup to an adult who is not on the authorized list.
• Developmental or instructional decisions. A family claims the program failed to raise a developmental concern or followed an inappropriate learning plan.

Some of these situations involve an injury and some do not. That is part of why professional liability exists: a claim can center on the quality of care even when no one was physically hurt.

Why general liability may not address every allegation

Many general liability forms contain a professional services exclusion. Depending on its wording, that exclusion can remove coverage for claims that arise from rendering or failing to render professional services. For a daycare, a broad version could reach supervision, medication, or instructional decisions.

Definitions matter just as much. One insurer may define professional services narrowly, another broadly, and a childcare specific policy may carve care and supervision back in. Do not assume every carrier draws these lines the same way. The only reliable answer comes from reading the actual forms.

How it fits with your other coverages

Professional liability is one piece of a childcare liability program. It works alongside:

• General liability. Handles bodily injury and property damage. In many childcare policies, both are written together.
• Abuse and molestation. Abuse allegations are commonly excluded from professional liability and handled through abuse and molestation coverage.
• Accident medical. Accident medical coverage pays a child's medical bills regardless of fault, which may help resolve a minor injury before it becomes a supervision claim.
• Umbrella. An umbrella policy may or may not sit over professional liability. Some follow it; others exclude professional services. Ask your agent to confirm.

If your program uses a business owners policy, check it closely. Many BOPs exclude professional services, so professional liability may need to be added separately.

Claims made and occurrence: a quick explanation

Professional liability may be written on an occurrence or a claims made basis. An occurrence policy generally responds to incidents that happen during the policy period, even if the claim is reported later. A claims made policy generally responds to claims first made during the policy period, as long as the incident happened after the retroactive date.

With claims made coverage, the retroactive date and any gaps between policies matter. If you change insurers, ask how prior acts are handled before the old policy ends.

Which programs should look closely at professional liability

Any program that supervises, feeds, and teaches young children has a professional exposure. Commercial daycare centers with infant rooms and medication routines, private preschools making instructional and developmental decisions, and in-home daycare providers caring for mixed age groups all have reasons to understand how their policy treats these claims.

What to review with your agent

Use this checklist when you review a renewal or compare quotes:

• Is professional liability included in the childcare package, or is it a separate policy or endorsement?
• How does the policy define professional services, and does that definition fit your program?
• Are there sublimits for professional liability or specific types of claims?
• Are defense costs inside or outside the limit of liability?
• If the coverage is claims made, what is the retroactive date?
• Who is an insured: owners, directors, teachers, substitutes, and volunteers?
• Are abuse allegations excluded here, and if so, where are they handled instead?

Our article on how to compare daycare insurance quotes walks through these differences side by side.

Getting a quote

As part of Nelson Insurance Agency, an independent agency, we can review how different insurers handle professional liability for childcare. Our guide to daycare insurance cost explains what affects pricing. When you are ready, request a quote and a childcare insurance specialist will review coverage options for your operation.