Does a home daycare need insurance? For most providers, yes. Once you start caring for other people's children in your home, you are running a business with business risks: enrolled children on your property all day, parents in your driveway at pickup, and the possibility of an injury or an allegation. Some states or programs may also require insurance or ask you to disclose your coverage to parents, so confirm the rules for your license type with your state childcare licensing agency.
This guide answers the question in general terms. When you are ready to look at coverage itself, see in-home daycare insurance, our main page for family childcare providers.
Why personal insurance is not enough
Homeowners, renters, and personal auto policies are priced and written for personal life. An occasional playdate is one thing. Caring for several children every weekday, for pay, is a different risk, and many personal policies treat it that way.
Enrolled children and parents on your property
A child falls from the climbing structure in your backyard. A parent slips on your front steps during the morning drop off rush. Claims like these come from your business, and many homeowners policies limit or exclude liability that arises from business activities in the home.
Abuse and molestation allegations
Allegations of abuse are a serious exposure for any childcare provider, even when the allegation is untrue. Personal policies typically are not built to respond to these claims, and many general liability forms exclude them too. That is why home providers often look at dedicated abuse and molestation coverage.
Property used in the business
Cribs, cots, high chairs, toys, a converted playroom, and outdoor equipment are business property once they are used for your daycare. Homeowners policies often place tight limits on business property, or exclude it.
Assistants and helpers
If you hire an assistant to help during nap time or the busy afternoon, an injury to that person is an employer issue. Personal policies are not designed for employee injuries, and your state's workers compensation law may apply.
Driving children
Taking children to the park, picking up school age kids, or driving to a field trip puts your vehicle to business use. Personal auto policies may limit or exclude that use.
Coverage options home daycare providers typically consider
Every program is different, but these are the coverages home providers most often review with an agent. Options vary by insurer and state.
- General liability. Third party injury and property damage claims, including, in many childcare policies, injuries to enrolled children.
- Abuse and molestation coverage. Defense and liability protection for abuse allegations, often added separately.
- Accident medical coverage. Helps pay an injured child's medical bills regardless of fault, which can keep small incidents small.
- Property coverage. Protection for daycare equipment, furniture, and supplies that a homeowners policy may limit.
- Workers compensation. For providers with assistants or employees, depending on state law.
- Commercial auto. For providers who drive children as part of the program.
Homeowners endorsement or standalone childcare policy?
Home providers usually choose between two broad approaches. The right fit depends on your state, your insurer, and the size of your program.
A home daycare endorsement on your homeowners policy
Some homeowners insurers offer an endorsement that adds limited coverage for a home daycare. These endorsements often come with restrictions, such as a cap on the number of children, lower liability limits, or exclusions for certain activities. Some insurers do not offer them at all, and others may decline to renew a home with a daycare.
A standalone childcare liability policy
A separate policy written for family childcare providers is designed around the daycare itself. Depending on the insurer, it may package general liability with options such as abuse and molestation, accident medical, and business property. You keep your homeowners policy for your home and family, and the childcare policy handles the business. Options vary by insurer and state, and eligibility depends on underwriting.
Requirements are only part of the answer
Whether insurance is required depends on your state, your license type, and any programs you participate in. Those requirements vary and change, so confirm them with your licensing agency. Our daycare insurance requirements guide explains where requirements come from and how to confirm them. Remember that a requirement is a minimum. Even where nothing is required, the exposures above are real.
Next steps for home daycare providers
Start by reading your homeowners policy for business exclusions, then list your children's ages, your activities, any helpers, and any driving you do. Our in-home daycare insurance page explains how coverage fits together for family childcare providers. To understand pricing, read our daycare insurance cost guide, and when you are ready, request a quote to review coverage options for your program.