As a person who works closely with young children, how often have you had a child come up and give you a big, unexpected hug and find yourself very uncomfortable because the child's head, hands, or something are in a really inappropriate place on your body? I'm sure if it hasn't happened directly to you, you have seen one of your staff members in that situation.
Ideally, we have such a good relationship with the children in our care, that they love to come up and give us a big hug every now and then. That's awesome, and we can gently talk with them about making sure that their various body parts wind up in appropriate areas on our bodies. Most children want and need to be touched; it is a normal aspect of human development. Good touching can contribute to the formation of positive relationships.
But, sometimes children do not yet understand what is appropriate touch with family members vs. what is appropriate touch with others; or what is simply inappropriate touch. Our staff members need to be well-versed on how to explain this clearly and calmly to children. Similarly, we need to work with our staff to make sure they know how to appropriately touch a child (and how to avoid inappropriate, or inappropriate-seeming, touch).
Having a Touch Policy, and training your staff on that policy, will help your staff to understand clearly what is appropriate and what is inappropriate; keeping you and them out of a "touchy" situation. (Sorry, bad pun, but I couldn't resist.) If you don't already have a Touch Policy in place, check ours out.