What’s Your Excuse for Not Purchasing Business Liability Insurance?

Business liability insurance protects family child care providers from the risks associated with caring for children.

These risks include:

  • Injuries to children: A child breaks her leg falling off your backyard slide or a toddler losers his finger after catching it in your sliding-glass door.
  • Lawsuits by parents: A parent breaks her arm after slipping on your icy front steps. Another parent accuses your son of inappropriately touching her child.

Despite these real risks, too many family child care providers don’t have business liability insurance to protect themselves, their family and their business.

Here are the common excuses providers give for not having this insurance:

“I don’t have any money, so why should I worry about a parent suing me?

Many providers incorrectly believe that they won’t be sued because they have little money. If a child is seriously insured, the parent probably won’t be deterred by your financial situation. If they do sue you, you’ll have to pay a lawyer to defend yourself.

If the parents win a lot of money in court and you can’t pay, they may be able to put a lien on your assets (such as your home), depending on your state laws. In some states, they could garnish up to 50% of your spouse’s wages. If you quit child care and take another job, your wages may be garnished. You may also be required to sell some of your assets, such as a second car, a boat, and personal items such as a second television, golf clubs, guns, and so on.

Usually a court judgment against you will last for ten years. If there is a lien on your home it will be difficult or more expensive to borrow money in the future. Any inheritance you receive may be taken.

So, even if you think that you have nothing now, you don’t want to be sued and possibly be responsible for paying a jury award for the rest of your life.

“I’ve never had an accident.”

Not having had an accident before is no guarantee you won’t have one tomorrow. Although you may never have had a car accident or had your house burn down, you’re probably insured for these possibilities. The consequences of a lawsuit can have a much more serious financial impact than the destruction of your car or home.

“I can’t be sued for more than my insurance coverage so why buy any more insurance than the bare minimum?”

Not true. You can be sued for any amount, and if you lose the case you could be stuck with a lien on your home or other property and your wages garnished for many years to come.

“I have parents sign a contract that says I’m not liable if something happens to a child.”

This won’t help. Liability waivers can’t prevent parents from suing you and judges won’t enforce them. Also, the injured child could sue you later.


Look upon business liability as the cost of doing business. The cost of business liability insurance is a few hundred dollars a year. It’s 100% tax deductible. It will give you peace of mind.

To find this insurance, go to my website, tomcopelandblog.com, and look at my insurance directory. You will also see my article, “Ten Questions to Ask Before Purchasing Business Liability Insurance.”

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Tom Copeland

I've been the nation's leading trainer, author, and advocate on the business of family child care since 1981. I'm a licensed attorney and have presented hundreds of business workshops for family child care providers across the country. I answer thousands of calls and emails each year to help providers, tax professionals and trainers understand complex business and tax issues. Call me at 651-280-5991. Email me at tomcopeland@live.com. Visit me on Facebook. From 1981 to 2009 I worked at Resources for Child Caring in Minnesota (now called Think Small), where I was director of Redleaf National Institute for 15 years. I've written nine books on the business of family child care published by Redleaf Press, a division of Resources for Child Caring. I was on the board of directors of First Children's Finance, a non-profit organization providing low interest loans and consulting and technical assistance to help family child care providers suceed as a business. They operate in Minnesota, Iowa, Michigan, North and South Dakota, Kansas, Missouri, and Texas. Here are some YouTube videos of me talking about my work with this organization and the business of family child care. I graduated from Macalester College (BA) in 1972 and from William Mitchell College of Law (JD) in 1980. I live in St. Paul, Minnesota with my wife Diane and two cats, Duke and Ella.