Daycare Business Insurance: Costs, Coverage, Requirements & Providers in 2026

Updated September 2026

Running a daycare comes with more risk than most small businesses ever deal with. You’re not just watching over a building and some toys. You’re responsible for young kids all day long, and kids move fast and don’t always look where they’re going. A skinned knee is normal. But a fall on the playground, a car accident on a field trip, or a leak of kids’ personal information can turn into a real problem fast.

That’s what daycare business insurance is for. It’s not one single policy. It’s a group of coverages you can pick and choose from, based on things like where you’re located, how many kids you watch, whether you have staff, whether you drive kids anywhere, and whether you work out of your home or a separate building.

This guide explains what daycare insurance usually covers, what it tends to cost, how the rules change from state to state, and 10 companies that sell coverage to daycares. It also answers some of the questions daycare owners search for most: should you form an LLC, how many kids can you watch in Florida without a license, what does it cost to run a daycare each month, and can you actually make money doing it. Rules and prices change over time, so use this as a starting point. Always check with a licensed agent or your state’s licensing office before you make a final decision.

What Is Daycare Business Insurance?

Daycare business insurance is a group of insurance policies built around the risks that come with caring for other people’s kids. Running a daycare is different from most small businesses. You’re supervising children who can’t always protect themselves, you may be driving them around, you’re holding onto sensitive family information, and one small slip-up can lead to a serious injury claim.

Here’s something a lot of new daycare owners don’t realize: your homeowners insurance is built to protect your home, not a business. If you run a daycare out of your house, your homeowners policy may not cover claims that come from your business — even if it happens in the same room where your family eats dinner. Insurance companies usually call this a “business activity,” and many homeowners policies leave it out on purpose. That means a claim that would normally be covered, like someone slipping and falling, might get turned down once the insurer finds out it happened during paid childcare.

Here’s a simple example. A child trips over a toy left on the floor of a home daycare and breaks an arm. The family thinks the provider wasn’t watching closely enough and files a claim. Whether general liability insurance — the business version, not a homeowners policy — pays for this depends on the exact wording of the policy. No policy covers everything automatically, and insurance companies can and do argue over claims. That’s exactly why daycare owners look at insurance made for businesses instead of assuming their home insurance already has them covered.

Daycare centers face a bigger version of the same problem. More space, more staff, more kids, and often a van or two — all of that adds up to more kinds of risk than one basic policy can usually handle well.

What Insurance Should a Daycare Have?

Short answer: A daycare may need a few different types of insurance — general liability, professional liability, workers’ comp if you have staff, and property coverage, among others. There’s no single required package. What you need depends on how your daycare runs.

General Liability Insurance

This is usually the main policy for a daycare. It’s meant to cover claims from other people — like a parent, visitor, or delivery driver — who gets hurt on your property, or if your business accidentally damages someone else’s property. It also usually covers legal costs if you get sued, even if the claim turns out to be false.

This is what most people mean when they search for daycare general liability insurance or daycare liability coverage. It’s often the first policy people buy, and it’s frequently bundled with property coverage in something called a business owner’s policy (BOP) to save money.

Professional Liability Insurance

This one works differently. General liability covers physical injury or damage. Professional liability — also called errors and omissions (E&O) insurance — covers claims that your business made a mistake in how it cared for a child. That could mean a claim that a child wasn’t watched closely enough, that an allergy wasn’t noted, or some other claim about how care was handled rather than a simple slip-and-fall.

Daycare professional liability insurance is usually sold alongside general liability, not instead of it, since the two cover different kinds of problems.

Abuse and Molestation Coverage

This is a sensitive topic, but it’s an important one for any business that cares for kids. Some general liability policies leave out abuse-related claims completely. That’s why insurance companies that specialize in childcare — a few are covered later in this guide — sell abuse and molestation coverage as an add-on or build it right into their childcare programs.

What’s covered, and what isn’t, can be very different from one insurer to the next, and getting this coverage may require things like background checks on staff and written supervision rules. Ask about this coverage directly rather than assuming it’s already included.

Workers’ Compensation Insurance

If your daycare has employees, workers’ compensation insurance generally pays for medical costs and lost pay if a worker gets hurt on the job. Rules for daycare workers compensation insurance are different in every state. Most states require it once you have any employees. Some set a minimum number of employees before it kicks in. A few states have different rules for small, family-run businesses. If you’re a sole owner with no employees, you often don’t need it — but check your own state to be sure.

Commercial Property Insurance

This covers your physical stuff — the building (if you own it), plus furniture, toys, computers, classroom supplies, and other equipment. If you rent your space, this coverage usually focuses on your belongings rather than the building itself, since your landlord typically insures the structure. If you own the building, you’ll want coverage that matches what it would cost to rebuild it.

Commercial Auto Insurance

A personal car insurance policy isn’t built to cover a vehicle you use for business — including driving kids to and from daycare, field trips, or business errands. If your daycare has a van or uses vehicles for these things, talk to an agent about commercial auto insurance. This can cover vehicles the business owns, vehicles employees use for work (like their own car), and any special rules your state has for vehicles that carry kids.

Cyber Liability Insurance

Daycares hold onto a surprising amount of private information — kids’ names, addresses, health and allergy details, and parents’ contact and payment info. Cyber liability insurance is meant to help cover costs if that data gets stolen or leaked, like notifying families, offering credit monitoring, or paying certain legal costs. As more daycares move to online enrollment and payments, more owners are asking about this coverage.

Business Interruption Insurance

This coverage is meant to help replace lost income and cover certain extra costs if a covered event — like a fire — forces you to close for a while. It usually only kicks in after a covered property loss, so it’s often sold together with property insurance rather than on its own. It probably won’t cover every reason a daycare might have to close, like a licensing issue or a health department order, so ask exactly what does and doesn’t trigger it.

Coverage Comparison at a Glance

Coverage	What it may help cover	Who may need it
General liability	Injury or property damage claims from other people	Almost every daycare
Professional liability (E&O)	Claims that care or supervision fell short, depending on the policy	Childcare providers of any size
Abuse & molestation	Certain covered claims, depending on the policy’s rules	Any business caring for kids
Workers’ compensation	Employee injuries on the job	Businesses with employees, where required by state law
Commercial property	Building (if owned), furniture, equipment, supplies	Daycares with physical stuff to protect
Commercial auto	Covered risks from vehicles used for business	Daycares that drive kids anywhere
Cyber liability	Certain costs after a data breach	Daycares that store family or payment info online
Business interruption	Certain lost income tied to a covered property event	Businesses with a matching property policy

No policy automatically includes everything on this list. Each one is usually priced, and sometimes excluded, separately.

How Much Does Daycare Business Insurance Cost?

How much does daycare business insurance cost? There’s no one number that fits every daycare, because your price depends on a lot of things:

• Where you’re located, down to the ZIP code
• How many kids you care for
• How much money the business brings in
• How many employees you have
• How long you’ve been in business and whether you’ve had any claims
• Whether you’re home-based or in a separate building
• Whether you drive kids anywhere
• How much your property and equipment are worth
• Which coverages, limits, and deductibles you pick

Because there are so many variables, published averages are more like a rough guide than a real quote. One small-business resource that tracks costs found that daycares in the U.S. tend to pay somewhere between about $300 and $800 a year for $1 million in general liability coverage alone — not counting any other coverage. A different insurance broker estimated small home daycares pay somewhere between $500 and $1,500 a year for a basic package, with larger centers paying more depending on their size. Treat both numbers as rough ranges, not quotes. You’ll only know your real price once you ask for one.

How Much Is $1,000,000 Liability Insurance a Month?

How much is $1,000,000 liability insurance a month? This is one of the most common daycare insurance questions people search for, and it comes from a small mix-up worth clearing up: “$1 million liability insurance” describes how much coverage you have, not a set monthly price.

That $1 million is called a coverage limit — the most the insurance company will pay toward a covered claim. Policies usually list this two ways:

• Per-occurrence limit — the most paid for any one claim
• Aggregate limit — the most paid in total across all claims during the year (this is often set higher, like $1 million per claim and $3 million total)

Having a $1 million limit does not mean your monthly bill is anywhere near $1 million. And it doesn’t mean every claim automatically gets paid out at the full $1 million — that depends on the facts of the claim, what the policy says, and any deductible.

Here’s an example to make this clearer. Picture two daycares, both with a $1 million liability limit. One is a small home daycare with no employees and no van. The other is a large center with 60 kids, a dozen staff members, and a shuttle van. They could both carry the exact same $1 million limit, but their monthly bills would likely look very different, because price is based on risk — not on the size of the limit alone.

For a general sense of scale, one small-business insurance marketplace says its own customers pay around $42 a month, on average, for $1 million in general liability coverage — but that’s across all kinds of businesses, not just daycares. A separate daycare-specific estimate put yearly general liability premiums (usually also written with $1 million limits) somewhere between $300 and $800. These numbers are useful for context, but your real price will come from an underwriter looking at your actual business.

Daycare Insurance Requirements

Insurance rules for daycares aren’t the same everywhere, and it helps to think of them in three separate buckets:

1. Legally required — coverage your state or local licensing office says you must have to operate
2. Required by contract — coverage a landlord, franchise, or program (like a government childcare subsidy) says you must carry
3. Just a good idea — coverage that isn’t required anywhere, but that most childcare pros and agents recommend given the risks involved

According to a 2024 report from NAEYC, a childcare advocacy group, cited by New America, liability insurance is legally required for licensed daycare centers in 30 states, and 21 of those states also require it for certain licensed in-home daycares. That leaves a fair number of states where it isn’t a state requirement — though a landlord, lender, or subsidy program might still make you carry it anyway.

States can also set specific minimum amounts. As one example, California says licensed in-home daycare providers must carry at least $100,000 per claim (or $300,000 total), get a $300,000 bond, or have signed papers from parents saying they know the provider has no insurance. This shows how differently states handle the same question. Since rules change, always check with your own state’s licensing office instead of trusting a national number.

Workers’ comp works the same way: most states require it once you have employees, but the details and exceptions (for sole owners, very small operations, or family members working for you) are different state to state.

10 Daycare Business Insurance Companies and Marketplaces to Consider

These companies and marketplaces serve different parts of the childcare world. Some focus on home providers, some focus on centers, and some are just places to compare quotes rather than insurance companies themselves. None of these is “the best” — coverage, pricing, and who qualifies all depend on your state, your business, and your risk level. Compare real quotes and read the actual policy before you decide.

1. NEXT Insurance

NEXT Insurance sells small business insurance straight to customers online, including a daycare/childcare package. It’s built around general liability, professional liability (E&O), commercial auto, workers’ comp, and commercial property, and it’s marketed to both home providers and centers.

Quote process: Fully online — NEXT says you can get a quote and buy coverage in under 10 minutes, with sample plan tiers you can compare. Possible pluses: Fast, do-it-yourself online quotes; instant proof of insurance; pay monthly if you want. Possible downsides: Since it’s a self-service digital company, it may fit smaller or simpler daycares better than large, multi-location centers that need a dedicated agent to sort out a complex risk. Who should look into it: Home providers and smaller centers who want speed over a personal agent relationship. Official website: nextinsurance.com

2. The Hartford

The Hartford is a large, well-known insurance company that sells a daycare and preschool insurance program meant to protect both staff and the kids in your care. As a full-service insurer, you’ll usually work with an agent rather than get an instant online quote. Possible pluses:

A big, established national company with a lot of experience in business insurance and agent support. Possible downsides: Probably requires an agent rather than a fast online quote; check state availability directly.

Who should look into it: Owners who want a well-known national company and don’t mind working with an agent. Official website: thehartford.com

3. Insureon

Insureon isn’t an insurance company itself — it’s an online marketplace (owned by Specialty Program Group/HUB International) that lets you fill out one form and get quotes from several insurance companies at once, including some that cover childcare. Insureon also publishes its own daycare cost estimates based on customer data.

Possible pluses: Compare several companies with one application; published cost info; agents who know nonprofit and small-business childcare risk. Possible downsides: Since it’s a marketplace, your actual coverage depends on which insurance company you get matched with. Who should look into it: Owners who’d rather compare several companies at once instead of contacting insurers one by one. Official website: insureon.com

4. Simply Business

Simply Business is another online marketplace, first started in the U.K. in 2005 and operating in the U.S. since 2017. It lets business owners compare quotes from about 18 partner insurance companies for coverage like general liability, professional liability, workers’ comp, and business owner’s policies, across hundreds of business types. Possible pluses: Quick online comparisons across several insurers; published average costs by profession; monthly payments available. Possible downsides: As a marketplace, how deep the childcare-specific coverage goes depends on which insurer you get matched with — ask about abuse coverage specifically. Who should look into it: Owners who want an easy, multi-company comparison, similar to Insureon. Official website: simplybusiness.com

5. Philadelphia Insurance Companies (PHLY)

PHLY, part of the Tokio Marine Group, runs a Child Care Centers insurance package built specifically for daycare centers, preschools, and after-school programs, covering both nonprofit and for-profit businesses. Their materials describe general liability up to $1 million per claim / $3 million total, coverage for the building and grounds, abuse and molestation coverage options, coverage for board members and administrators, and optional coverage for corporal punishment claims, plus property, extra liability, and auto coverage. PHLY is rated A++ (Superior) by AM Best, a company that rates insurers’ financial strength. Possible pluses: A program built specifically for child care centers, with abuse/molestation coverage clearly offered and strong financial ratings. Possible downsides: Works through independent agents, not instant online quotes, and not available in every state. Who should look into it: Center owners who want a specialty insurer with real childcare experience. Official website: phly.com

6. Markel

Markel calls itself one of the top providers of commercial child care insurance in the country, serving centers and after-school programs of all sizes. It also runs a separate program for in-home providers, offered through a membership group called the American Federation of Day-Care Services (AFDS). Possible pluses: Offers both a center program and a separate in-home program, so it covers a lot of ground. Possible downsides: The in-home program requires AFDS membership (with its own yearly fee) and works through agents rather than direct online purchase. Who should look into it: Both center owners and in-home providers, depending on which Markel program fits. Official website: markel.com

7. Assure Child Care

Assure Child Care sells a group accident and liability policy for licensed in-home daycare providers, historically offered in more than 40 states plus Washington, D.C. It used to be part of an organization called Adults and Children’s Alliance, which still runs separately as a food-program sponsor and childcare support group. Possible pluses: Built specifically for licensed in-home providers rather than centers. Possible downsides: Which states it’s currently available in should be double-checked directly, since group programs like this can change over time. Who should look into it: Licensed in-home/family daycare providers, not larger centers. Official website: assurechildcare.com

8. Utica National

Utica National runs a Child Care program for for-profit and nonprofit chartered centers, franchises, independent centers, and Montessori programs. Their materials mention abuse and molestation coverage, protection for decision-makers, coverage for playground equipment and fences, help during a crisis (counseling, security, first aid), and coverage if kids’ private information gets leaked. Utica National is rated A- (Excellent) by AM Best, and they only operate in a set list of core states rather than the whole country. Possible pluses: Over 40 years of experience insuring classrooms and playgrounds, according to their own materials, plus a specific data-leak coverage angle for kids’ private info. Possible downsides: Only available in their listed core states — mainly the Northeast, Mid-Atlantic, Southeast, and parts of the Midwest and Texas. Who should look into it: Center owners located in one of Utica National’s core states. Official website: uticanational.com

9. SECURA Insurance

SECURA sells commercial child care insurance built for before/after-school programs, Head Start programs, and licensed or certified commercial daycare centers (including 4K/5K programs). Their materials mention a property coverage bundle for damage to your building and belongings, and they note that most states require some type of insurance for daycare centers. SECURA only sells through independent agents, not online. Possible pluses: A program built for school-connected and pre-K programs, not just standard daycares. Possible downsides: You’ll need to go through a local independent agent, and it’s not available everywhere. Who should look into it: Center owners, especially ones running before/after-school or Head Start-connected programs. Official website: secura.net

10. Soma Insurance

We couldn’t find any current, real information about a U.S. company called “Soma Insurance” that sells daycare or childcare business insurance. If someone recommended this name to you, check directly with your state’s insurance department to confirm it’s a real, licensed company before you trust it, and compare it against the providers above.

Provider Comparison Table

Provider	Type	Might be a good fit for	Online quote	Childcare-specific coverage	Notes
NEXT Insurance	Direct online insurer	Home daycares and smaller centers	Yes	Yes (built-in daycare package)	Fastest do-it-yourself quote of this group
The Hartford	National insurer	Established centers	Contact them	Yes (dedicated program)	Works through agents
Insureon	Marketplace	Comparing several companies	Yes	Depends on which insurer you’re matched with	Publishes its own daycare cost data
Simply Business	Marketplace	Comparing several companies	Yes	Depends on which insurer you’re matched with	About 18 partner companies
PHLY	Specialty insurer	Daycare centers	Contact them	Yes (dedicated program)	A++ rating from AM Best
Markel	Specialty insurer	Centers and in-home providers	Contact them	Yes (two separate programs)	In-home program needs AFDS membership
Assure Child Care	Specialty group program	Licensed in-home providers	Contact them	Yes	Historically 40+ states plus D.C.
Utica National	Regional insurer	Centers in their core states	Contact them	Yes (dedicated program)	Limited to their listed states
SECURA	Regional insurer	School-linked and commercial centers	Contact them	Yes (dedicated program)	Sold only through agents
Soma Insurance	Unclear	Unclear	Unclear	Unclear	Couldn’t confirm a real, current childcare offer

Should a Daycare Be an LLC?

Should a daycare be an LLC? An LLC, or limited liability company, is a type of business setup, usually formed through your state, that’s meant to keep some legal separation between your business and your personal belongings. Daycare owners often think about forming one because:

• It may help keep business debts and claims separate from personal things like your home or savings, if the LLC is kept up properly
• It gives you a more formal setup for business bank accounts, contracts, and taxes
• It lets you choose how the business gets taxed
• It can look more professional on contracts and licensing paperwork

Here’s the part that matters most: an LLC is a business setup, not a stand-in for insurance. Forming an LLC doesn’t make liability disappear — it’s meant to help keep certain business debts tied to the business itself, but that protection isn’t perfect. Courts can undo an LLC’s protection if it isn’t kept up properly, and an LLC doesn’t pay for anything when a claim happens — that’s what insurance does. A lot of daycare owners use both: an LLC for the legal setup, and insurance for the money side of things.

The rules and costs for setting up and keeping an LLC (state fees, yearly paperwork, and so on) are different in every state, and the tax side of things depends on your situation. Since this touches on both business law and taxes, talk to a licensed lawyer or accountant who knows your state before deciding.

How Many Kids Can You Watch Without a License in Florida?

How many kids can you watch without a license in Florida? There’s no single number that works everywhere in the state, and any simple answer here would be misleading. Florida’s rules depend on a few different things layered on top of each other.

At the state level, Florida law says a child care facility is a place (usually not someone’s home) that cares for more than five kids who aren’t related to the owner, in exchange for pay. Once you cross that line, you generally need a full license from the Florida Department of Children and Families (DCF) or your local licensing office. But that’s not the only category:

• A family day care home is a home where child care is regularly given to kids from at least two unrelated families, for pay. Depending on the ages of the kids, the number allowed under Florida’s statewide rules is usually somewhere between about 4 and 10 — with tighter limits on how many babies under 12 months you can have.
• A large family child care home is similar, but it needs at least two full-time childcare workers on site (one must live there), and you usually need to have run a licensed family day care home for at least two years first. These homes can care for more kids — often cited as up to around 12, again depending on the ages.
• Five Florida counties — Broward, Hillsborough, Palm Beach, Pinellas, and Sarasota — run their own local licensing instead of (or alongside) the state, and their exact rules can be a bit different from the numbers used in the other 62 counties.

In short: watching a few kids who are related to you, or helping out one other family informally without pay, might not require a license. But caring for kids from more than one unrelated family for pay, even a small number, generally puts you under Florida’s rules — and going over five unrelated kids for pay pushes you toward needing a full license. Whether you qualify for any exception also depends on how the kids are related to you, whether you’re being paid, and which county you’re in.

Since this is a real legal question with serious consequences if you get it wrong, check your exact situation with the Florida DCF Office of Child Care Regulation, or your local licensing office if you’re in one of the five counties above, before you start any paid childcare in Florida.

How Much Does It Cost to Run a Daycare Monthly?

How much does it cost to run a daycare monthly? There’s no single monthly number that works for both home daycares and big centers — costs change a lot based on size, location, and staffing. The main things you’ll pay for usually include:

• Rent or mortgage
• Utilities
• Insurance (the coverages we covered earlier)
• Payroll and payroll taxes (a big one once you have staff)
• Food and snacks
• Classroom supplies and learning materials
• Cleaning supplies
• Licensing fees, training, and background checks
• Software for enrollment, billing, and attendance
• Marketing
• Repairs and upkeep
• Gas and vehicle costs, if you drive kids around
• Accounting or legal help
• Loan payments, if you borrowed money to set up the business

Example Monthly Budget (Just an Example — Not a Universal Number)

Expense	Small home daycare	Larger commercial center
Facility (rent/mortgage/utilities)	Often low if you’re home-based	Usually a big expense, based on square footage
Payroll	Often little to none if you run it yourself	Usually your biggest expense once you have staff to meet ratio rules
Insurance	A smaller monthly cost	Bigger, since it covers more and at higher limits
Food	Modest, based on how many kids you have	Grows with enrollment, and may need food-program paperwork
Supplies	Modest	Higher, since it covers more classrooms
Software	Basic or free tier is often fine	Usually a paid billing/enrollment system
Utilities	Often part of your home bills already	A separate, sizeable cost
Marketing	Little to none (word of mouth)	May include a real marketing budget
Other (licensing, training, repairs)	Modest	Grows with the size of the building and staff

These are just categories to think about, not real dollar figures — your actual costs depend a lot on your state, local wages, how many kids you have, and how you run things. Build your own budget from real quotes and your local market instead of a national average.

Is Owning a Daycare Profitable?

Is owning a daycare profitable? It can be, but it depends on a lot of the same things that drive up your costs: how many kids you have enrolled, what you charge, staff-to-child ratios (which set a hard limit on how much staff you can support with a given amount of revenue), rent, insurance, food costs, licensing, how much demand there is nearby, your prices, how well you collect tuition, office overhead, the value of your own time, taxes, and surprise expenses.

The basic math is simple, even though what goes into it isn’t:

Revenue − Operating Expenses = Operating Profit

A daycare can bring in a good amount of money and still end up with thin or no profit if costs — especially payroll, usually the biggest expense once you have staff — are high compared to what you charge. Staff-to-child ratio rules (set by your state) put a ceiling on how much money a given amount of staff can bring in, which is one reason childcare is often described as a tough business even when there’s a lot of demand. Several state surveys of childcare providers have found profit margins in the low single digits, even at well-run businesses.

Just as a made-up example, not a real prediction: a home daycare with modest enrollment and no employees might keep more of its income as profit (though a lot of that is really paying the owner for their own time), while a staffed center might have thin margins even with strong enrollment, because payroll, rent, and insurance all grow together. Your actual results depend on your local market, so build a real budget with your own numbers before assuming anything.

Home Daycare Insurance

Home daycare insurance is business insurance built for people who care for kids in their own home. Like we covered earlier, a regular homeowners policy isn’t built to cover business activity, and many homeowners policies leave out claims tied to running a business from home. That means the insurance most home providers actually need looks like a smaller version of daycare center coverage:

• General liability for injury or property damage claims tied to the business
• Professional liability for claims about how care was handled
• Abuse and molestation coverage, where it’s offered, given who you’re caring for
• Property coverage for business equipment, toys, and supplies (which your regular homeowners contents coverage may not fully cover, since it’s business property)
• Accident medical coverage, where it’s offered, to help pay small medical bills directly instead of only kicking in during a lawsuit
• Workers’ compensation, if you have an assistant
• Attention to your state’s specific licensing and insurance rules for in-home daycares, which — like we said above — vary a lot

One of the most important things any home daycare provider should do: tell your homeowners insurance company that you run a childcare business out of your home. Some insurers will adjust your policy, decide not to renew it, or ask you to also carry a separate business policy once they find out. It’s much better to have that conversation now than to find out about a gap in coverage after something’s already happened.

Daycare Insurance vs. Homeowners Insurance

Feature	Homeowners insurance	Daycare business insurance
Built for	Your home and personal liability	Your business and business liability
Business activity	Often left out or limited once you tell them about it	Built specifically to cover business risk
Childcare-related liability	May be excluded or limited by a “business activity” exclusion	May be covered, depending on the policy
Business equipment/supplies	Often limited coverage for business items	Business-specific coverage may apply
Professional liability	Usually not included	May be available separately
Overall setup	Personal risk	Business risk

Every policy reads a little differently — check your own homeowners policy or ask your agent directly instead of assuming.

How to Get a Daycare Insurance Quote

1. Figure out what kind of daycare you run — home-based, family child care home, or a full center.
2. Figure out how many kids you care for or are licensed for.
3. Figure out if you’re home-based or commercial, since this changes which insurers fit.
4. List your employees, including part-time and seasonal staff.
5. Think about transportation — do you own or use a vehicle for the business?
6. List your property and equipment you want covered, along with what it would cost to replace.
7. Pick the coverages you want, from the list earlier in this guide.
8. Compare quotes from at least two or three places — a marketplace and a specialty insurer, for example.
9. Read the exclusions carefully, especially around abuse/molestation coverage and any “business activity” exclusion.
10. Make sure the policy meets your licensing and any contract or landlord requirements before you buy it.

What to Have Ready Before You Get a Quote

• Your business name, business type (sole owner, LLC, etc.), and address
• How many kids you’re licensed for and how many you currently have
• How many employees you have and what they do
• Whether you’re home-based or in a separate building
• Vehicle info, if you use one for the business
• Any past claims
• What coverage limits you currently have or want
• A copy of your state or local license or registration, if you have one

Questions to Ask an Insurance Provider

• What’s my liability limit, and is it per claim, total for the year, or both?
• Is abuse and molestation coverage available, and what does it and doesn’t it cover?
• Is professional liability included, or is that a separate policy?
• Are my employees covered under this policy?
• What happens since I work from my home — are there any exclusions I should know about?
• Is transportation covered, including field trips?
• Are playground accidents covered?
• What exactly does this policy leave out?
• What’s my deductible, and how does it work for each claim?
• Is legal defense included in my coverage limit, or is it extra?
• Can I raise my coverage later if my business grows?
• Can I get proof of insurance quickly if a landlord or contract asks for it?
• Does this policy meet my state’s licensing rules and any contract or landlord rules?

Daycare Insurance Checklist

Before you buy insurance, think through:

• [ ] Your business type (sole owner, LLC, etc.)
• [ ] Your state and local licensing status
• [ ] How many kids you care for
• [ ] How many employees you have
• [ ] General liability
• [ ] Professional liability
• [ ] Abuse/molestation coverage
• [ ] Workers’ compensation
• [ ] Property coverage
• [ ] Commercial auto
• [ ] Cyber coverage
• [ ] Business interruption
• [ ] Coverage limits
• [ ] Deductibles
• [ ] Exclusions
• [ ] How fast you can get proof of insurance
• [ ] Any contract or landlord requirements

Frequently Asked Questions

What insurance should a daycare have? Most daycares think about general liability and professional liability first, then — depending on staff, driving, and whether you own your building — workers’ comp, property, auto, cyber, and business interruption coverage. What’s right depends on how you run your business.

How much is $1,000,000 liability insurance a month? “$1 million liability insurance” means a coverage limit, not a monthly price. The real cost depends on your business’s own risk. Rough industry numbers put daycare general liability (often written at $1 million limits) somewhere between a few hundred dollars and under $1,000 a year — but a real quote is the only way to know your actual price.

Should a daycare be an LLC? An LLC is a business setup that can help separate business and personal things, but it isn’t insurance and doesn’t replace it. Many owners use both. Talk to a lawyer or accountant to see what fits your situation.

How many kids can you watch without a license in Florida? There’s no single flat number — it depends on how many unrelated families you serve, the ages of the kids, whether you’re paid, and which county you’re in (five counties run their own local licensing). Caring for more than five unrelated kids for pay generally means you need a full license; smaller in-home setups with kids from a couple of unrelated families fall under family day care home rules with their own limits. Check with Florida DCF or your local licensing office for your exact situation.

How much does it cost to run a daycare monthly? Costs change a lot depending on size and location — rent/utilities, payroll, insurance, food, supplies, licensing, software, marketing, and repairs all add up differently for a home daycare versus a big center. There’s no single “average” that fits both.

Is owning a daycare profitable? It can be, but profits are often thin because staff-to-child ratio rules limit how much money a given amount of staff can bring in. It depends on enrollment, pricing, costs, and local demand — it’s not guaranteed either way.

How much does daycare business insurance cost? It depends on where you’re located, how big you are, how many employees you have, and what coverage you pick. Rough industry numbers put daycare general liability alone at a few hundred dollars to under $1,000 a year, with basic full packages for small operations sometimes cited around $500–$1,500 a year — but only a real quote will tell you your actual cost.

Do home daycares need insurance? It’s not required by law everywhere, but it’s widely recommended, and some states do require it for licensed in-home daycares. A regular homeowners policy usually isn’t built to cover business activity, which is the main reason home providers look at business insurance instead.

Does homeowners insurance cover a home daycare? Usually not — homeowners insurance is built around personal, non-business risk, and many policies leave out claims tied to running a business from home. Check your specific policy or ask your insurer directly instead of assuming you’re covered.

What does daycare liability insurance cover? Usually, general liability insurance for a daycare covers claims from other people about injury or property damage tied to your business, based on the exact terms of your policy.

Do daycare owners need workers’ compensation insurance? In most states, yes, once you have employees — but the exact rules and exceptions are different state to state, so check your own state’s requirements.

What is the difference between general liability and professional liability? General liability covers physical injury or property damage claims from other people. Professional liability (E&O) covers claims that your business made a mistake in how it delivered care, like a claim about not watching a child closely enough.

How do I get daycare insurance? Figure out what kind of daycare you run, gather your business details (enrollment, staff, vehicles, property), then compare quotes from a marketplace and/or a specialty insurer, checking exclusions and limits before you buy.

What is a typical daycare insurance limit? $1 million per claim with $3 million total for the year is a common setup you’ll see in childcare insurance programs, though actual limits and choices depend on the insurer and what a landlord or licensing office might require.

This article is for general information only. It’s not a substitute for advice from a licensed insurance agent, lawyer, accountant, or your state licensing office.

Final Thoughts

Daycare insurance isn’t one-size-fits-all. A home provider caring for a handful of kids has a very different risk level — and a different shopping list — than a 100-kid center with a fleet of vans and full-time staff. General liability insurance is usually the starting point for nearly every childcare business, but professional liability, abuse and molestation coverage, workers’ comp, property, auto, cyber, and business interruption coverage are all worth a look depending on how you run things.

Insurance rules are different in every state, and Florida’s licensing rules in particular depend on how many unrelated families you serve, the ages of the kids, and which county you’re in — always check with Florida DCF or your local licensing office instead of trusting a flat number. An LLC and insurance solve two different problems: one is a legal setup, the other is financial protection, and most owners benefit from having both. And while owning a daycare can be profitable, thin margins are common in this business, since staffing ratios put a hard ceiling on how much money each staff member can bring in.

Instead of picking one “best” company, compare real coverage, limits, exclusions, deductibles, price, customer service, how fast you can get a quote, state availability, and childcare experience across a few of the providers above — then pick what actually fits your business.

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