Child care costs are devastatingly high for parents. One main cause for that is because of the cost for these businesses to purchase commercial insurance. The reason for such high premiums is because of both the frequency and severity of claims in this industry. When a child is involved in an industry it brings an element to the industry that adds emotion. Because of that emotion, lawsuits become more frequent. Regardless of whether the lawsuits are founded or not the legal fees can still rack up to a hefty amount. Because of this fact, carriers tend to change their appetite for quoting daycare centers frequently. This can change what a carrier charges for premium drastically from year to year, which make it difficult for employers to know if they are getting a good deal on their policy.
Carriers appetite for this industry changes frequently because of the claims history involved and the uniqueness of this industry. The risks of a day care center are dramatically different compared to the risks of cleaning company or a medical office. If one carrier has a year or a couple of years where their claims history has a higher frequency or larger than normal severity they may change what they charge for premium in this industry. This change in price may have nothing to do with you or your business, but rather reflects the carriers overall appetite for quoting this industry.
The good thing is many agencies offer exclusive programs designed for the child care industry. If they are an independent agent, they can usually find programs with several insurance companies. This can help daycare centers find the lowest rates on coverage and prevent large fluctuations in premium. Business owners should speak with their agent about the need to stay with one carrier for the long term. It may be cost effective to switch carriers frequently, but when a claim does occur the carrier is more likely to drop your business from coverage if you do not have a long standing relationship with them. Especially if the claim is a large one. If you have stuck with one carrier for several years, you have adequate training, safety programs and risk management programs in place than that carrier is more likely to work with you when an incident does occur.
Below are some of the NCCI Class Codes Associated with the Daycare industry
- 8869 Child Care Centers- All Employees. This classification typically includes centers that care for both pre-school and school-aged children. It doesn’t include traditional schools with before and after school care programs. However, this class would include child care centers operated by organizations such as YMCA’s and churches.
- 7380 Drivers and Chauffeurs. This is a common class code utilized for day care centers with vans or buses for transportation.
- 8868 College- Professional Employees. Adult day care facilities may utilize this code for day time senior care where there is very limited medical care involved. May also be applicable to learning centers.
- 9101 College- Other Employees. This code would apply to adult care staff who are not in a professional role or utilizes specialized skills. This may include maintenance, grounds keepers, food service and driving.