Childcare Insurance Issues - Medical Payments Coverage and
Occurrence / Aggregate Policy Limits
___________Peter E. Han - Director NSI Legal and Claims. West Bend Mutual Insurance Company_____________
Children suffer injuries at childcare centers, just like they do at home. Active children are especially likely to fall while playing, just like they do at home. Just like at home, the injury usually simply is a result of the sometimes painful process of growing up, rather than the fault or negligence of the caregiver.
When a child has been injured in a childcare setting, the caregiver should provide the appropriate level of medical care and parental involvement. Prepare the necessary incident report. But do not suggest that the injury was the fault of any of the caregivers.
Usually, when a child sustains an injury and medical care is needed, the parents of the child will pay the medical bills under their health insurance. Most incidents are resolved at that level and go no further. Sometimes the parents look to the childcare provider to assist with payment of the medical bills, however, and the childcare liability insurance policy contains a provision that might provide that assistance.
The medical payments coverage is a "no fault" type of coverage. If the injury is sustained as a part of the childcare activities, then coverage is provided without anyone having to worry about concepts like negligence or liability. The coverage is intended to cover the amount that is not covered by the parents' health insurance because of a deductible or coinsurance provision. Parents who request assistance for payment of unreimbursed medical charges should be told to submit copies of the medical bills showing the amounts paid and unpaid by the health insurer. Note: most policies state that the medical treatment must be necessary, the charges must be reasonable, and the coverage is available for one year from the date of injury.
The medical payments coverage of our childcare policies is $10,000. That amount is much more than the charges ordinarily incurred because of a deductible or coinsurance provision. Some parents do not have health insurance, however, and medical expenses can add up in a hurry.
Unless an adequate level of medical payments coverage is available in the childcare provider's inurance policy, the child's parents, facing unpaid bills, may feel compelled to visit with a lawyer. In those situations, medical payment limits of $1,000 or $5,000 may not be enough.
Some insurers of childcare businesses include medical payments coverage in their policies, but then exclude injuries to children from that coverage. Those policies only provide medical payments coverage for an adult injured while dropping offor picking up a child, or for other adult visitors. On the other hand, the policies issued by West Bend Mutual provide coverage for injuries to both children and adults.
In rare instances where a child is injured through the negligence of the childcare provider, the policy provides liability coverage. That coverage can be made available to pay for medical bills in excess of $10,000, as well as for such items as pain and suffering. While almost all childcare claims involve only minor injuries, sometimes disaster strikes, so it is important that the liability occurrence limit be adequate.
The occurrence limit is the amount available to pay for an injury due to any single accident. Many childcare providers choose to obtain an occurrence limit of $1,000,000. It might take that much to settle an extremely serious claim.
A childcare provider also needs to look at the aggregate liability limit, though. The aggregate limit is the amount of coverage available to resolve all of the claims that arise during the annual policy period. It is important that the aggregate limit be larger than the occurrence limit. If the two limits are the same amount, then one extremely large claim for a single occurrence could deplete teh insurance coverage available for all other claims that have arisen during the policy period. Many childcare providers choose to carry an aggregate limit twice as large as the occurrence limit.
A wise childcare provider seeks the assistance of an insurance agent who specializes in the writing of childcare business and who understands the nature of the risk insured. If you have any quesitons or concerns about your insurance coverage, then call your agent, The time to make sure that you have adequate coverage is now, rather than after a child has been insured.
