As with any business, when you are running a child-care centre it’s vital to have a careful risk management plan in place to cover yourself, your business and your assets. It can be confusing to make sense of the different kinds of insurance and what they all mean, and to understand what you need to do as the owner of a day-care centre in terms of liability, risk management and insurance policies. Speak to your GSK Insurance broker about the things to consider when outlining your risk management protocols. Here are some tips to get you started. 

Be Aware of Licences/Permits

Legal requirements around necessary licences and permits for child-care centres can differ from state to state, so it’s important you research those specific to your area. Different licences may be required to care for children of specific ages, so make sure you obtain the necessary ones for your business model. These licences and permits often need to be updated or re-licenced every few years, so make sure you keep on top of this.


Staffing Considerations

While not all staff have to have specific qualifications, there are guidelines that must be adhered to in regards to the ratio of qualified and unqualified staff working at any one time. In addition, there are strict rules about how many children can be placed under the care of the staff before more staff need to be added. Staffing guidelines are one of the aspects examined by an insurance company when writing a policy. For the safety of the children, with the benefit of lowering premiums, make sure your staff rostering and training is at 100% compliance. 


In addition to staffing considerations, an insurance provider writing a policy for a child-care centre will look at the safety of the building, interiors, exteriors, and safety protocols. State guidelines determine specific rules for buildings of child-care centres (and it’s important to adhere to them), but beyond that it’s also vital to ensure the buildings are safe for the age groups you will be hosting. Age-specific furniture – like small chairs for young kids – will help reduce the risk of injury, and will be taken into consideration by your insurance provider. 

Crisis Management

Safety is of the utmost importance in any business model to mitigate the risks of injury and losses to your business. As listed above, having good safety protocols in place will help reduce this risk. However, accidents can happen, and therefore it’s essential to have a sound crisis management plan in place. This plan will outline the course of action in the event of an accident, injury or other incident. Educate staff so that everyone knows what the crisis management plan is for each scenario, and will be able to act swiftly. Consider other events which are largely out of your control but which may impact your business – like floods, other extreme weather events, power failure or fire. Establishing a plan and ensuring each staff member can follow it will minimise the effect these incidents would otherwise have on your business. This quick, effective management of a crisis will help ensure your reputation stands up after the event, too. 

Health and Sickness Policies

Young kids are often sick, and in many cases it is seen as an unavoidable aspect of attending child-care. However, it’s essential you have in place a clear health and sickness policy, so that both the staff and parents of the children know when to remain home, or keep their child at home. This is particularly crucial now, in the face of the global COVID-19 pandemic. The state and federal governments are already imploring people to remain at home if they are sick – make sure your health and sickness policies mirror those set by the governing bodies in your region. Having a solid policy in place is important – as well as ensuring each party involved in your child-care centre is aware of the policy, and follows it. 

General Liability Insurance

General Liability Insurance covers common risks, such as injury to a child, and damage to the property of a child. This type of insurance is great for peace of mind – it will protect you from the high cost of lawsuits, and will help you qualify for leases and contracts. Because of the general nature of this insurance, and because it covers against injury to customers (in this case, the children in the centre), many small businesses purchase this insurance from the beginning. 

Property Insurance

Property Insurance will cover you for broken, lost, or stolen business property and equipment. This includes losses as a result of a break-in, natural events such as a flood, a fire, or many other events where your company suffers property loss. As with General Liability Insurance, oftentimes you will need this level of insurance if you are renting or leasing the space for your child-care centre. Many insurance providers will offer bundles on insurance, and you may be able to bundle your Property Insurance with your General Liability Insurance policy to reduce premiums and get all the coverage you need. 

Management Liability Insurance

This insurance will protect you personally, and therefore protect your business and your assets. It covers a manner of things such as misconduct, breach of duty and misleading statements. Management Liability Insurance will cover you for investigative costs as well as necessary legal fees. This insurance largely relies on close examination on a case by case basis, so check with your policy to see what is covered. 


While running any business, a sound risk management plan and solid insurance coverage is crucial – but it can seem especially so when little people are involved! To run a successful child-care centre, parents need to feel safe and secure in leaving their children with you. These risk management steps are necessary not only so you can run a successful, secure business, but also so that you can offer the parents peace of mind that their child is being looked after in a safe environment, with careful protocols in place should they be necessary. 


Not sure how your risk management plan stands up? Contact your GSK Insurance broker today. 

May 4, 2021

By Graham Knight

Founder and Managing Director of GSK Insurance (established in 1981). Graham draws upon more than 50 years’ experience in the insurance industry, working in both insurance and broking across various private, public and government sectors in Australia.

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