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Tomato or Tomatoe?

Recently I had a conversation with a school owner about using her facility for birthday parties on weekends.  She had two reasons she was considering this plan.  First, many of her local competitors had begun renting their facility out for birthday parties in off hours.  She found that this was a draw for many parents, knowing that they would not have to give any thought at all to their kids' parties.  Her second reason for considering this plan was the additional revenue it would generate.

Let's face it.  The past 6 years have been a struggle for just about everyone.  We are all still standing, but there is the constant concern about how to build income.  This particular school owner sees the use of her school during off hours as a way to boost income while keeping her program in tact Monday – Friday.

So, she called me and asked me if her insurance would cover this use.  Sadly, the answer is no.  The insurance purchased for early childhood education schools is limited to the business of early childhood education.  When you begin to use your school for other activities {e.g. birthday parties, dance classes that are not a part of your curriculum, gymnastics classes, other social events} your liability insurance does not give you any protection.  YIKES!

Just imagine the kid on your playground for a birthday party that falls off the slide, fractures his leg in the growth plate and will have one leg shorter than the other for life AND you don't have the liability insurance protection.  I don't know about you, but I don't want to linger over that thought.

The reason insurance does not provide protection for any activity is because they must be able to assess the risk of what you are doing, decide if it is something for which they are willing to provide insurance and if it is, how much they will charge.  When you begin to mix different types of risks in the same business it becomes very challenging to find the insurance.  One insurer might be willing to write the birthday party center but not the child care; another might be willing to write the child care but not the party center.  The trick is to find one insurer that will write everything you do.

I applaud my client for calling me before making the decision to start doing birthday parties.  My advise to each of you is to make that call to your agent first.  Let them know what you want to do and send them out to find the coverage before you change your business.

I value your feedback.  Please email me at: beth@blockinsurance.net Or, email steven@blockinsurance.net     

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