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 childcare 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 operate under strict supervision and quality standards set out by the National Quality Framework and overseen by the Australian Children’s Education & Care Quality Authority (ACECQA). These standards place clear obligations on centres to provide safe, appropriate and well-supervised care. When allegations arise around inadequate supervision or failure to meet professional standards, investigations can escalate quickly. 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 managers have personal responsibilities under workplace health and safety legislation, including duties outlined by Safe Work Australia. These obligations extend beyond day-to-day operations and into governance, risk management and incident response. 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 highly sensitive information, including children’s personal records, medical details, family contact information and payment data. Under Australian privacy law, organisations must meet obligations overseen by the Office of the Australian Information Commissioner (OAIC), and breaches can trigger mandatory reporting requirements and regulatory scrutiny.

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 childcare insurance in place ensures your centre is protected against unexpected legal, financial and operational risks. Regularly reviewing your childcare insurance program with a specialist who understands the sector can help identify gaps early and ensure your protection evolves as your centre grows.

As specialists in childcare insurance and risk, Barrack works with centres across Australia to help operators better understand and manage these exposures. Learn more about Childcare Insurance here