Fran has owned a daycare in Fort Worth for 15 years. She started with just a few kids in her home and built it into a trusted center for families in her community. Fran has always handled everything herself. That includes everything from hiring teachers to making sure the building stays up to code. She loved her work and never thought much about what would happen if she had to step away.
Then one morning, Fran was in a car accident on her way to work. She was seriously hurt and had to stay in the hospital for several weeks. After that, she spent months at home recovering and doing physical therapy. She couldn’t return to work per her doctors instructions.
Unfortunately, Fran had not built a plan for how the daycare would run without her. Without her presence, things started to slip. Collecting tuition was a problem, running payroll on time was a problem, and even just paying bills was a problem. The staff didn't know what to do and families began leaving as they saw the struggle to maintain the business for her extended period of absence.
When attendance began to dwindle so did the income. Then the bills started stacking up, and her staff didn’t know what to do. Fran’s story shows how quickly things can change, even if just for a time period. And it highlights why disability insurance is something every daycare business owner should think about for themselves.
When Fran was out for several months and the monthly income for the business began to drop, she wasn’t able to take a paycheck as she had previously. Like many daycare owners, her income came from what was left after paying bills and meeting payroll at the center. Without her working, there was no money coming in for her family.
Imagine if Fran was never able to return to work. Disability benefits helps in situations like hers, or if the problem is long term. Disability income insurance can provide money each month so that personal bills like rent, groceries, and medical expenses can still be paid while the owner is recovering. But covering your own income is just the beginning.
While Fran was in the hospital, rent on the daycare building still had to be paid. So did the power bill. And her teachers needed their paychecks. These childcare business expenses do not take care of themselves whether Fran was able to work or not.
That’s where business overhead insurance can help. Overhead coverage can be included with business disability benefits when a policy is underwritten and owned by the business rather than the individual person. This is a key difference between a business and individual disability insurance policy.
This coverage would have provided the regular expenses of Fran running her daycare while she was out. Rent, utilities, insurance premiums, and staff wages can all be paid through this kind of disability coverage. Unfortunately, Fran didn’t have this kind of coverage, and it made her time away even harder.
Fran had business insurance, which is important. But her business owners policy didn’t help her when she got hurt. That’s because the business insurance required of child care providers protects the building and the children, not the owner’s annual income.
To protect your own paycheck, you need disability insurance of some kind. It’s a separate policy that gives you money when you can’t work. An individual policy will only cover your household expenses based on your verifiable income. On the other hand, a business disability policy can cover business expenses, which can also include what you pay yourself.
Fran hadn't put a plan in place, and was now being forced to to make hard decisions. But even she did have a plan in place, understanding how long it will last becomes important.
Fran had never been out of work before, so she assumed that a few weeks of help would be enough. But her recovery took much longer than she expected, and the financial obligations were looming large.
Short-term disability insurance only covers a small period of time. This is usually a few weeks to three months. After that, the help stops. If you are seriously hurt or sick like Fran, you may need longer to get back to work. That’s where long-term disability insurance comes in.
Long term disability coverage can keep your disability income going for several months or even years. Individual policies can cover your income until your retire. A business owned disability policy that is designed with a long term benefit period can keep your business afloat until you are either able to sell it or return to work completely. While these monthly benefits can help you stay afloat personally, it also helps the people who rely on your daycare.
Fran’s teachers started to leave when they weren’t sure if the daycare would stay open. Parents were finding new care for their children and they saw the handwriting on the wall. When Fran was finally healthy enough to return, things didn’t look the same.
If she had been able to keep paying staff and covering bills, the daycare could have stayed steady during her time away. As it was, her business was on the brink of closing and she had gone deeply in debt. Her business could have been in a stronger place when she was ready to come back. That’s why it’s important to think about this disability coverage before something unexpected happens.
Fran didn’t know how fast everything could change until it happened to her. Her daycare struggled and so did her family. If she had looked into disability insurance earlier, she could have protected both. That is why True Texas Education Insurance not only looks at what is required by the state, but also helps you envision the future of your business.
Our independent insurance agents ask questions and get to know your business, so that they can recommend a comprehensive insurance plan to meet your needs. This unique program is designed to help daycare owners find the best protection for their needs.
As a daycare owner, you have a lot on your plate. But planning ahead gives you and your business a better chance to survive if you ever have to step away.
Click the button below to talk with someone who understands daycare insurance and can help you protect your income and your center.