I know that the home day care exposure is excluded by ALL homeowners policies unless you can get a company to endorse the policy for a fee. The problem is that this day care endorsement is hard to find because of the exposure. If you can find the coverage, it only applies if you have 3 or fewer kids (my person has 4).
I think I would be more comfortable passing on this person. I know I can find another good TB.
In the process of searching for a tenant/buyer, I found a nice couple that fits my profile. However, the lady does in-home babysitting for 4 children. I am afraid of the liability exposure.
It would bother me…but it may be that this TB can get some type of liability insurance and name you in the policy. I’d call your insurance company and see how they would handle a claim. If this is an unlicensed and uninsured business then chances are YOUR insurance company will have a problem.
Not that it has anything to do with your deal…but I recently had a TB apply who owned a rotweiller and a snake. My insurance company does not cover ME for rotweillers and snakes (they claim snakes carry salmonella and if a guest for instance got sick and sued me I wouldn’t be covered).
Check it out with your insurance company…make sure what your coverage is. And then there is the issue of possible wear and tear on the property. Remember they don’t own it until they put a bank loan on it.