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Category Archives: Managing A Childcare Company or School

How To Limit Liability in a Montessori School

Like with everything else, there is always the risk of liability when you own a Montessori school. Here are some of those risks and ways to manage them.

  1. The Heart Stopper: Make sure you never lose track of a child. This terrifying event is most likely to happen when moving back and forth to the playground or when children are transported via busses or vans. Sometimes it is not enough to count the number of children. Make sure at least one person goes all of the way to the back of the bus or van checking in and under every seat. Children are easily overlooked when they are in the back of a bus or van.
  2. Observe Good Business Practices: This act is incredibly important. While it doesn’t guarantee that you will be safe in your business environment, it certainly reduces the risk of getting sued.
  3. Business Component Incorporation: Incorporate your business to limit your personal liability.
  4. Real Estate: If you own real estate for your early education company, own it in a corporation or LLC that is different than the corporation that owns your business component. By holding your real estate in a different entity, it can be protected from litigation against the Montessori school operating company. Remember, you don’t have to be wrong to be sued. Over the years, we have seen school owners sued frivolously for little more than a parent that needed a source of income.
  5. Transportation: While some companies don’t go this far, owning your company vehicles in a separate transportation company helps to limit liability in the event of a traffic accident. This structure also gives you the option to lease the vehicles to your operating school and thus giving you and your CPA more flexibility at tax time.
  6. Insurance: Make sure you have the proper insurance coverage, including but not limited to, liability, property, flood and business interruption coverages.
  7. Teachers: Train your teachers so they instinctively guard against any threat to the children, themselves or your center(s).
  8. Playgrounds: Sectionalize playgrounds to make sure older children don’t accidently collide with the little ones when playing outside.
  9. Security: Install proper security doors and surveillance cameras so unwanted visitors don’t gain access to your center or the people in it.
  10. Licensing Compliance: While licensing is always part of the daily business, keep in mind that the regulations are there with good purpose. Sometimes it is the smallest act of prevention that stops a catastrophe.
  11. Professionals: Make sure you have at least one good attorney and one good CPA on your team. Having the right professional to show you the correct path is much easier and less expensive than learning things through experience.

By following a few practical rules, you can reduce your risk and limit liability in your Montessori school.

As always, I hope it helps.

Brad Barnett, President
BFS®

(Legal Disclaimer: Always consult the proper professionals before taking action. By and before the use of the information provided herein, reader agrees that BFS® is not responsible for viewer’s actions related to said information.)

Know How To Count Your Money In Early Education

  Whenever professionals discuss the financial performance of early education companies, the conversation will always include “cash flow”…and that can be dangerous. The term “cash flow” can mean many different things and it can be the cause of material misunderstandings that can lead to litigation or you losing some of your money…or both. Instead of… Continue Reading