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What is nanny insurance?

Nanny insurance provides tailored protection for childcare professionals, offering financial security against accidents or property damage that may occur while children are in your care, whether you operate independently or through an agency. It will protect you from financial losses due to any accidents, injuries or property damage that may occur while someone else’s children are under your care.

This type of insurance is essential for anyone providing professional childcare services in Canada.

What nanny insurance includes

Nanny insurance is built by combining key coverages designed to address the unique risks that come with providing professional childcare. Here are some of the most common options to consider:

• Professional liability: Also known as errors and omissions (E&O) insurance, professionial liability insurance covers claims related to allegations of negligence, mistakes or failure to perform your professional duties as expected. For instance, you might not properly administer the child’s medication or feed them a meal they might be allergic to. This coverage would provide you with the necessary funds for legal defense and settlements.
• Commercial general liability (CGL): Also known as ‘slip-and-fall’ coverage, commercial general liability covers non-professional risks, such as bodily injury or property damage that occurs during the course of work but not due to professional advice or services. For example, you accidentally breaks a valuable item in the home or a child trips over a toy and gets injured, CGL would cover those claims. This is the foundation of any nanny insurance policy (or any business insurance policy in general).

Recommended add-ons for nanny insurance coverage

While the basic coverage may seem comprehensive enough, there are numerous other protections that you may want to consider, including these:

• Home-based business endorsement: If you’re looking after children from your own home, this would extend your home insurance coverage to include protections for liabilities arising from business operations. If a child gets injured on your property or your childcare activities lead to property damage, this would cover the costs. This would also cover your legal fees if a parent files a claim against you.
• Commercial auto insurance: If you transport children as part of your job, personal auto insurance may not cover business use. You could add a business-use endorsement or separate commercial auto policy.
• Tools and equipment insurance: Tools and equipment insurance protects high-value specialized childcare equipment, toys and supplies you've purchased for your business.
• Cyber liability insurance: If you store client information digitally, this protects you from data breaches and cyber incidents.

Common types of nanny insurance claims

Here are some examples of the types of claims childcare professionals tend to file:

• Injury claims: A child falls and breaks their arm while playing under your supervision. Medical costs and potential legal fees could easily exceed thousands of dollars. Commercial general liability would cover those costs.
• Allergic reaction: Despite following instructions, a child has an allergic reaction to food you prepared. Parents may hold you responsible for medical expenses. Professional liability coverage would provide you with the necessary funds.
• Property damage: While caring for children, expensive furniture or electronics are accidentally damaged in the home. If you’ve expanded your home insurance coverage to include home-based business, you’d be protected.

How much does nanny insurance cost?

There’s no predetermined premium that we can name when it comes to nanny insurance, given that your coverage can be as customizable as you would like. That said, most basic packages would start at around $400 per year.

Some of the factors that may impact your insurance premium include:

• Type of coverage: Basic policies with standard coverage will cost less than comprehensive policies with multiple add-ons.
• Coverage amount: The higher the coverage limits, the more expensive the policy.
• Location: Insurance costs can vary based on where you provide your childcare services. If the area where you work has a lot of reported break-ins, for instance, then there is a higher chance that your equipment could get stolen.
• Experience level: The more experience you have under your belt as a nanny or babysitter, the less likely you are to make costly mistakes, and thus, the less you’ll pay in premiums.
• Location: Insurance costs can vary based on where your business is based and conducted. If the area where you do businesses has a lot of crime, for example, then there is a higher chance that some of your assets could get stolen.
• Claims history: If you have recently filed a claim, then there is a high chance that you’ll file another one in the future. Insurers take this into account and adjust their premiums accordingly. As you might expect, more claims in the past equal to higher premiums in the future.

How to get the cheapest nanny insurance rates

Finding affordable nanny insurance doesn’t mean you have to compromise on coverage. Here are some tips to get the best rates:

• Bundle policies: If you have home or auto insurance, ask about multi-policy discounts. Many insurers offer savings when you bundle business insurance with personal policies.
• Increase your deductible: A higher deductible – the amount you pay out-of-pocket on a claim – can lower your monthly premium.
• Maintain a good record: A history of providing quality care without incidents demonstrates lower risk to insurers, which can translate to better rates.
• Take professional development courses: Completing childcare certifications or first aid training shows insurers you're committed to professional standards, potentially lowering your premiums.