What Insurance Does a Daycare Need?
Short answer: Every child care business needs general liability (usually required for state licensing), professional liability, and abuse & molestation coverage with real limits. Add workers compensation once you have employees, commercial property for your building and equipment, commercial auto if you transport children, and accident medical for the kids in your care.
1. General Liability Insurance
General liability is the coverage state licensing, landlords, and food-program enrollment all ask to see. It pays third-party bodily injury and property damage claims: a child hurt on the playground, a parent slipping in the entryway, a fire that spreads to a neighboring unit.
Most states require $300,000–$1 million in liability limits for licensed programs; most landlords and many contracts want $1M per occurrence with additional-insured status. Given how little the jump to $1M costs, we quote it as the default.
2. Abuse & Molestation Coverage — The One That Matters Most
Here is the hard truth of child care insurance: the claim that can end your business is an abuse allegation, and many standard policies exclude abuse & molestation entirely — or cap it at a sublimit that won't cover the first month of defense costs.
This coverage responds to allegations against staff, volunteers, or even other children in your care, and critically it pays defense costs — which routinely run six figures even when allegations are unfounded. When you compare quotes, this is where cheap policies hide their savings. We show you the A&M limit in writing on every quote, because a policy without it isn't cheaper — it's empty.
3. Professional Liability
Professional liability (also sold as educators' or child-care professional liability) covers claims about the care itself: supervision decisions, medication administration errors, failure to follow an allergy plan, an incident during a nap-time check. These aren't "accident" claims, so general liability may not respond — professional liability does. It's usually packaged with GL for child care classes.
4. Workers Compensation
Required by law in nearly every state once you hire employees. Child care staff claims are real: lifting injuries, bites, playground falls, slips in kitchens. Comp also protects you — an injured employee with no comp coverage sues you directly. Rates run roughly 1.5–4% of payroll for child care class codes depending on state.
5. Commercial Property
Covers your building (or leasehold improvements if you rent), playground equipment, furniture, cribs, toys, kitchen equipment, and supplies. Two details matter for daycares: replacement cost valuation (not depreciated), and business interruption coverage — if a kitchen fire closes you for six weeks, it replaces the tuition you couldn't collect.
6. Commercial Auto
If you run vans or buses — field trips, school pickup, transport programs — you need commercial auto with limits sized to the fact that your passengers are children. If staff ever use personal vehicles for program errands, add hired & non-owned auto.
7. Accident Medical
A no-fault coverage that pays medical bills when a child is hurt in your care, regardless of liability. It's inexpensive, parents-facing in the best way, and often prevents the small injuries from ever becoming liability claims — a parent whose ER bill was paid rarely calls a lawyer.
What State Licensing Typically Requires
| Requirement | Typical Rule |
|---|---|
| General liability | $300K–$1M, proof at licensing and renewal |
| Workers comp | Statutory, once you have employees |
| Commercial auto | Required if transporting children; limits vary by state |
| Abuse & molestation | Increasingly required by licensors, landlords, and referral networks |
Requirements vary by state — we confirm your state's rules when we quote, and issue licensing-ready certificates the same day you bind.
Get the Whole Package Quoted in One Day
We package GL + professional + abuse & molestation + property + comp with carriers that specialize in child care. Same-day quotes, 100% placement, 30% average savings. Request your quote and we'll come back today.