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Daycare Liability Insurance: Protecting Your Business, Staff, and the Children You Care For

Running a daycare is more than a job—it’s a responsibility. Parents trust you with their children’s safety and development, which means every scraped knee, food allergy, or slip-and-fall accident could become more than a momentary scare. Without the right protection, even a small incident can spiral into medical bills, lawsuits, or licensing issues.

That’s where daycare liability insurance comes in. Whether you operate a small in-home daycare, a growing center, or a licensed facility, having the right coverage keeps your business financially secure while giving parents confidence in your care.

This guide will walk through:

• What daycare liability insurance is

• Why it’s required in many states

• What it covers (and what it does not cover)

• How much daycare insurance costs

• How to choose the right policy

• FAQs on coverage, licensing, and costs

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Our Solutions for Daycare Providers

At Hotaling Insurance Services, we ensure your daycare has comprehensive protection with tailored solutions from our dedicated service lines:

• Commercial Insurance Services
  Core coverage tailored for business operations, including general liability, commercial property, and package policies that combine these for streamlined protection.

• Private Client Services
  Ideal for home-based daycare providers or in-home care businesses requiring personalized, high-limit liability protection with flexibility and concierge-level servicing.

• Employee Benefits & Workers’ Compensation (includes workers’ comp)
  Essential for daycares with staff—this ensures legal compliance and covers medical expenses, lost wages, and employer liability in the event of employee injuries.

• Claims Support Services
  When you have to make a claim—whether it’s a slip-and-fall incident or a property loss—our claims team ensures swift advocacy and clear communication to minimize disruption.

• Commercial Auto Coverage (under Commercial Insurance)
  Critical for daycares offering transportation—protects vehicles, passengers, and third parties during pick-ups, field trips, and daily operations.

• Business Umbrella Liability (under Commercial Insurance)
  Provides an extra layer of liability protection beyond standard coverage limits—important if your daycare hosts large events or faces higher potential liability.

• Life Insurance for Key Staff (in case of key staff loss impacting operations)
  While not directly daycare liability, having key-person life coverage can help ensure business continuity if a pivotal caregiver or manager is lost unexpectedly.

What NEXT Insurance Offers Daycare Providers—and How Hotaling Matches (or Beats) It

Even though Hotaling offers tailored, broker-based solutions, it’s smart to understand what NEXT Insurance advertises—so you can see the value of working with us.

Discounted Coverage Packages NEXT Offers:

• NEXT promotes savings of up to 25% on their childcare insurance policies.
  

Price Tiers NEXT Highlights:

• Basic (“Lowest Price”) – Contains general liability (e.g. $500K per-occurrence), commercial auto, workers’ comp, and property coverage limits up to $25K.
  

• Pro (“Most Popular”) – Raises limits (e.g. $1M general liability, $500K workers’ comp) while keeping commercial property at $25K.

• Pro Plus (“Best Coverage”) – Offers $1M+ limits on all key lines—liability, workers’ comp, commercial auto, and property.

Monthly Premium Ranges:

• General Liability: $56–$78 per month (≈ $675–$944 annually) for most customers.

• Workers’ Compensation: $31–$61 per month (≈ $377–$733 annually), plus Employer Liability up to $1M.

• Commercial Property: $28–$62 per month (≈ $341–$740 annually), average deductible ~ $500.

In-home Daycare Specifics:

• NEXT policies cover up to 15 hours per day and up to 18 children, and do not extend to overnight or commercial center care.

• You can apply and get coverage within 10 minutes, with policy docs delivered via email the next business day.

• Coverage includes: General Liability, Professional Liability (E&O), and Accident & Health.

• Certificates of Insurance (COIs) are available 24/7 by web or app—unlimited digital access.
  Next Insurance

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Why It’s Still Worth Partnering with Hotaling

• Broader Coverage Options — Unlike NEXT’s in-home limitations, Hotaling delivers solutions for both in-home and licensed off-site daycares, including commercial centers and overnight care.

• Flexible Policy Bundles — Build custom packages with general liability, professional, property, auto, workers’ comp, and umbrella coverage—all tailored to your risk.

• Customized Pricing Strategy — While NEXT might offer discounts, we optimize pricing across multiple carriers and lock in the best coverage-to-cost fit, not just the lowest quote.

• Dedicated Support — From licensing guidance to policy renewals and claims support, our team helps you navigate every step.

For the tailored blend of protection your daycare truly needs, you can’t beat this level of personalization—especially in a market where providers face narrowing options and rising premiums.

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Why These Services Matter for Daycare Providers

• Comprehensive Compliance: From general liability to workers’ comp, our services ensure your business meets and exceeds licensing and regulatory requirements.

• Customized Coverage: We build your policy around your daycare’s unique risks—from field trip vans to on-site playgrounds.

• Ongoing Protection: Our claims and benefits teams provide support beyond the policy—helping to manage risk and resolve incidents effectively.

• Scalability: Whether you operate a small home-based daycare or a multi-facility center, our offerings adapt to your scale.

Let us help you piece together the right combination of these services—linking coverage‎, compliance, and care—for complete peace of mind.

What is Daycare Liability Insurance?

Daycare liability insurance is a specialized form of general liability insurance tailored to the childcare industry. It covers risks such as:

• Bodily injury: A child falls on the playground, or a parent slips during pick-up.

• Property damage: A child accidentally damages another person’s property.

• Personal injury claims: Defamation, slander, or reputational harm.

• Legal defense costs: Attorney fees, court expenses, and settlements.

Unlike homeowners insurance—which typically excludes business use—daycare liability insurance is designed specifically for the risks of caring for children.

👉 Related: Business Insurance for Daycare Providers

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Why Insurance is Essential for Daycares

1. Homeowners insurance won’t protect your daycare.
   Standard policies often limit business coverage to $2,500 and exclude liability. If a child is hurt in your home daycare, you could be personally responsible for damages.

2. State licensing often requires insurance.

   • In Texas, listed family homes and childcare centers must carry at least $300,000 in liability coverage per child.

   • In California, family daycares must have at least $100,000 per occurrence / $300,000 aggregate—or have parents sign affidavits acknowledging no coverage.
     Every state sets its own rules, so check with your licensing agency.

3. Medical bills and lawsuits can be devastating.
   Even minor injuries can result in thousands of dollars in treatment and legal fees. Insurance ensures one accident doesn’t threaten your livelihood.

👉 Related: Liability Insurance Options

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What Does Daycare Liability Insurance Cover?

Most policies cover the following:

• Physical injuries – Falls, allergic reactions, or playground accidents.

• Property damage – Broken toys, furniture, or even neighbor’s property.

• Personal injury – Claims of slander or defamation.

• Legal defense – Court costs and settlements up to policy limits.

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What Daycare Liability Insurance Does Not Cover

Competitors often skip this part—but it’s crucial to know the exclusions. Typical policies do not cover:

• Intentional harm (if abuse or negligence is proven deliberate).

• Criminal activity (theft, fraud, or illegal operations).

• Unlicensed operations (if you’re not compliant with state law).

• Vehicles (requires separate commercial auto coverage).

• Employee injuries (covered under workers’ compensation).

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Additional coverages daycare operators should consider

👉 Related: Commercial Umbrella Insurance Options

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How much does daycare insurance cost?

The cost varies widely based on your location, size, and services. Here are common ranges:

• General liability: $450 – $2,000 per year (avg. ≈ $42/month).

• Professional liability: $750 – $1,200 annually.

• Commercial auto: $1,000 – $4,000 annually.

• Property insurance: $500 – $900 annually.

• Workers’ compensation: ≈ $62/month, depending on payroll.

• Business owner’s policy (BOP): ≈ $82/month, combining liability + property.

Factors affecting premiums:

• State laws and minimum requirements

• Number and age of children enrolled

• Number of employees

• Claims history

• Chosen deductibles and limits

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Step-by-step: How to get insurance for a daycare

1. Assess risks – Walk through your daycare facility and note hazards.

2. Check licensing rules – Verify required coverage with your state.

3. Gather information – Number of children, payroll, vehicles, facility details.

4. Request multiple quotes – Compare insurers specializing in daycare coverage.

5. Bundle policies – Liability + property + workers’ comp can reduce costs.

6. Review exclusions – Know what’s not covered before you sign.

7. Revisit annually – Update coverage as your daycare grows.

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Managing risk and lowering premiums

• Maintain a safe facility (inspect playgrounds, secure chemicals, keep walkways clear).

• Train staff in CPR, first aid, and proper supervision ratios.

• Implement allergy and illness protocols.

• Keep thorough incident and maintenance records.

• Review coverage limits annually.

👉 Related: Risk Management Resources

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FAQs on daycare insurance

Q: What insurance is needed to open a child daycare school?

A: At minimum, general liability and workers’ compensation (if you hire staff). Many states also require professional liability and abuse/molestation coverage.

Q: How much does daycare insurance cost?

A: On average, $450 – $2,000 per year for general liability, with additional policies raising the total depending on services offered.

Q: Does homeowners insurance cover in-home daycare?

A: No. Homeowners policies typically exclude business-related claims. You need a specialized home daycare insurance policy.

Q: What does daycare insurance not cover?

A: Criminal acts, intentional harm, unlicensed operations, or employee injuries (those require workers’ comp).

Q: Do daycare workers get health insurance?

A: Not through liability insurance. Health insurance for staff must be provided separately as an employee benefit.

Q: Can you sue a daycare without liability insurance?

A: Yes. If a daycare lacks coverage, owners may be personally liable for damages.

Q: Do all states require daycare insurance?

A: Many do (e.g., Texas, California), but requirements vary. Always check your state’s licensing rules.

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12. The Hotaling Difference

• We don’t just quote policies—we consult your business model, licensing requirements, and risk profile.

• We don’t just favor NEXT—we test the best available carriers for fit, affordability, and credibility.

• When carriers pull back, we advocate for you.

• We offer ongoing support from application, claim support, to renewal—all with transparency and trust.

Let’s build protection that keeps your doors open, your team safe, and your reputation solid—reach out to Hotaling Insurance Services today.

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Final Note

The current daycare insurance landscape is volatile, with premiums skyrocketing and coverage narrowing. Yet insurance remains non-negotiable—not just for legal compliance but for protecting the children in your care, your staff, and your livelihood. With deep partnerships, smart underwriting, and strategic bundling, Hotaling helps providers stay resilient. Secure your future with coverage that understands your reality.