Childcare Centre Insurance: Common Risks, Coverage Gaps and How to Protect Your Centre
What operators often overlook, and how to protect your centre
Running a childcare centre is about much more than daily routines and learning programs. You’re responsible for the safety of children, staff, families and visitors, every single day.
Having the right childcare insurance in place is essential to protect your centre from legal claims, financial loss and unexpected disruptions.
With busy play environments, hands-on activities and constant movement, even small incidents can quickly become serious legal, financial or reputational issues if risks aren’t properly managed.
Through our work with childcare operators across Australia, we regularly see the same challenges and insurance gaps emerge. Many centres only discover those gaps after a claim.
This guide outlines the most common childcare insurance risks and coverage gaps, and where protection is often overlooked.
Injury & Public Liability Claims
One of the most frequent exposures for childcare operators
Childcare environments are naturally active. Slips, trips and falls happen, whether it’s a wet floor after water play, playground equipment, or a visitor navigating stairs.
Common incidents include:
- Slips and falls
- Injuries from toys or play equipment
- Visitors tripping or falling on site
If a child, parent or visitor is injured, the centre may be liable for medical costs, compensation and legal defence expenses
Common gap:
Liability limits that haven’t been reviewed in years and may not reflect today’s legal costs.
What helps:
Public & Products Liability insurance with limits suited to your size, enrolment numbers and foot traffic.
Supervision & Professional Negligence Allegations
When duty of care is questioned
Childcare centres have a clear responsibility to provide adequate supervision and safe care. Claims can arise from allegations of:
- inadequate supervision
- poor care
- failure to meet professional standards
- breaches of professional duties
Even when staff act in good faith, complaints or misunderstandings can escalate into formal claims requiring legal defence
Common gap:
Assuming general liability insurance covers professional decisions and care standards.
What helps:
Professional Indemnity insurance, designed specifically for claims relating to professional services and advice.
Property Damage to Buildings & Equipment
When your physical environment is disrupted, so is your business
Childcare centres rely heavily on their facilities, buildings, furniture, toys, outdoor structures and learning resources.
Damage from storms, fire, vandalism or accidents can result in:
- expensive repairs
- equipment replacement
- temporary closures
Property damage is one of the most common claim categories across the childcare sector
Common gap:
Under-insuring assets to reduce premiums, only to find that replacement costs are much higher.
What helps:
Property or Industrial Special Risks cover that reflects full replacement value.
Business Interruption
The hidden risk many centres underestimate
Fixing a building is one thing. Covering lost income while you’re closed is another.
After a significant property event, such as fire or storm damage, centres still will face:
- wages
- rent or mortgage payments
- utilities and fixed costs
- reduced enrolments
Recovery can be slow and financially stressful with income protection.
Common gap:
No business interruption cover, or limits that are too low to cover several months of downtime.
What helps:
While rebuilding, business interruption insurance protects revenue and ongoing expenses.
Management & Leadership Liability
Personal exposure for directors and managers
Legal responsibilities follow leadership roles in childcare. Directors and officers can be personally liable for decisions or failures in governance, compliance or workplace safety.
Claims may arise from:
- employment disputes
- regulatory investigations
- alleged breaches of workplace safety obligations
- management decisions
These situations can affect both the organisation and individuals in leadership roles
Common gap:
Assuming the company structure fully protects personal assets.
What helps:
Management Liability (Directors & Officers) insurance.
Accidents Involving Children & Volunteers
Extra protection that’s often forgotten
Not all injuries fall neatly under liability claims. Medical treatment or rehabilitation may be required from activities causing accidental injuries of children or volunteers.
Common gap:
Solely relying on liability policies for every scenario.
What helps:
Group Personal Accident cover to provide additional protection for unforeseen incidents
Cyber & Privacy Risks
A growing exposure for modern centres
Childcare providers hold a series of sensitive information; personal records, medical details, family data and payment information.
Cyber incidents such as hacking, phishing or ransomware can disrupt operations and create serious privacy obligations.
Common gap:
Assuming cyber threats only affect large organisations.
What helps:
Cyber & Privacy Liability cover to manage both financial losses and third-party claims.
Bringing it all together
While every centre is different, a strong childcare insurance program typically combines:
- Public & Products Liability
- Professional Indemnity
- Property & Business Interruption
- Management Liability
- Group Personal Accident
- Cyber cover
The right mix depends on your size, staffing and operations, and should be reviewed regularly as your centre grows.
Final thoughts
Childcare operators provide an essential service to families and communities. Having the right protection in place means you can focus on what matters most, caring for children, with confidence.
Regularly reviewing your insurance and risk program with a specialist who understands the childcare sector can help ensure there are no gaps as your centre grows and evolves.
As specialists in childcare risk and insurance, Barrack works with centres across Australia to help operators better understand and manage these exposures. Learn more here
