Are you positive the child hasn't antagonized the dog in some way? Not that biting is acceptable, but little kids are often too rough or don't know when to back off. If the dog hasn't growled or bitten anyone else, I'm wondering if your daughter has, without meaning to, made the dog feel threatened.
I was bitten by a very ferocious dog outside while walking home one day, so I have never lost my fear of dogs. Being bitten is traumatic.
However, this dog is your father's companion.
You need your father to take care of your kids so you can work and do what you need to do in your life AND now, in order for him to be able to continue helping you do that, you want him to also get rid of his dog.
To you, the choice is easy. And most convenient.
I'm sure your dad feels terrible about what happened.
My nephew was bitten by my sister's dog after being repeatedly told to stay away from her when she was eating. She was a wonderful dog. Patient. She put up with a lot. But, she didn't want him trying to jump on her or yank on her when she was eating. And one day it happened.
Everyone wanted my sister to put the dog to sleep. That was the first thought that came to her head. But, she just couldn't do it.
My nephew healed up, stayed away from the dog when she was eating. The dog never bit anyone again. They had her for many more years with no problem.
My grandpa had an old poodle who got really nervous with kids in the house in his old age. He was fine during the day, but at night, when it was time to settle down, he didn't stand for little kids acting up. He would bark and growl and get after us if we started acting up and getting crazy. He was affectionate and loved to be held and petted. He would sit with us on the couch. But if we got up to run or jump around after bath and jammies, he put us in our place. He never bit because we didn't push it.
My grandpa got that dog before my grandmother got sick with cancer. When she died, that dog became his buddy. They both missed my grandmother so much.
When the dog got old and grouchy, we couldn't expect Grandpa to get rid of him or put him down.
If you don't feel your daughter is safe, you will have to find alternate daycare.
Keeping the dog in a bedroom is a workable solution until you can get that figured out.
Your dad may change his mind about keeping the dog, but he may not.
Yes, humans should always come first, but your dad loves his dog too.
Like I said, it's an easy choice for you.
Not so easy for him.
I hope your daughter heals up quickly and she'll be all right.
I wish there was an easier answer.
Best wishes.