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industry & Markets
Interesting Niches | Childcare
With Lisa Vercillo—President, Magenta Insurance Professionals
Magenta Insurance Professionals specialize in commercial insurance solutions for childcare, children’s education and children’s activities, which make up over 80% of their business. Their expertise in this sector gives Magenta an edge when working on their client’s insurance and risk management plans—they’re dedicated to understanding the ever-changing challenges their clients face.
What are some of the unique challenges insuring your clients?
Long tail liability and specifically Abuse exposure with no statute of limitation can be a concern for insurers. Forest Schools and Outdoor Programs incorporate “risky play” as part of their core learning criteria and some insurers are nervous to hear of children climbing trees, using hand tools or learning how to build campfires.
Regulated home childcare providers who work with a licensed agency also face challenges—the Ministry allows them to provide care for up to six children in Ontario, but home insurance policies usually limit them to three or four. We have a solution for these and other insurance challenges the childcare sector faces.
Do you do anything specific to target this segment?
Our clients, social media groups and various childcare associations provide referrals. We’ve been advocating for childcare centres since 1999 providing comprehensive, affordable insurance solutions and word gets around.
Our various areas of focus are Licensed Childcare Centres, Regulated Home Childcare Providers, Childcare Agencies, Forest Schools and Tutoring across Canada—each have their own marketing plan. A client-facing digital platform for small noncomplex childcare is key to providing affordable coverage in a timely manner. BC, Prairie provinces, Ontario and Atlantic Canada all have their own rating matrix on our website. But we find most childcare providers are advice-driven, and we tend to speak to most clients before or during the first year’s purchase.
How has the pandemic impacted this niche?
It has emphasized that childcare is an essential service. Childcare centres across Canada have remained open or were closed for a relatively short period of time. Centres have very strict Covid prevention protocols that include enhanced cleaning and sanitizing requirements. Staff are required to wear PPE and aren’t allowed to mix cohorts, and parents and visitors aren’t allowed inside.
How has coverage changed to adjust to these shifting businesses?
Most commercial insurance policies specifically excluded coverage for business interruption due to infectious disease prior to Covid. Now we’re seeing insurers adding or clarifying wordings to make it clear that infectious disease isn’t insured under business interruption. They’re also adding an infectious disease exclusion on liability.
What do you think will change within this niche once the pandemic’s over?
Wheels are in motion for a long-awaited National Childcare Plan by the current Federal Government. It’s designed to significantly reduce what parents pay for care in the coming years. The goal is to make life more affordable and drive economic growth by drawing more women back into the workforce. I expect that the licensed childcare sector will expand across Canada.
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