DAY CARE INSURANCE

QUESTION: Can the association purchase insurance in the name of the day care center to cover itself if the center does not carry any insurance?

ANSWER: Yes, an association can purchase liability insurance for the day care center. However, the association’s best option is to have the day care home purchase its own liability insurance for the following reasons:

1. The association’s general liability insurance policy already protects the association against claims of bodily injury and property damage. If a claim is made against the association, its insurance carrier would defend the association and its officers and employees. Keep in mind, however, that the insurance carrier is not obligated to defend the day care home or its operator.

2. It may appear unfair and unreasonable to homeowners for the association to bear the burden of purchasing and paying for the day care home’s insurance policy.

Associations may adopt reasonable rules and regulations related to the operation of day care centers.

Updated by ADAMS KESSLER 8/19/2008