How much does insurance cost for a child care center or home daycare?

The license, not the market, sets the minimum

In child care, the licensing law itself often names an insurance amount as a condition of operating. The rules split three ways. Some states make liability insurance mandatory. Others make it mandatory with an escape valve: parents are told, in writing, that there is no coverage. A third group never requires the coverage but requires the disclosure. The same state often treats centers and home providers differently.

Scroll the table sideways to see every column.

What each rule means in practice:

• Texas. Section 42.049 of the Human Resources Code covers every license or registration holder, which includes centers and registered child-care homes. The policy must cover injury to a child “on the premises of or in the care of the holder”, so field trips and transport count. Holders file a certificate with HHSC every year. Letting the policy lapse is a ground for suspending or revoking the license⁠¹. The notice exception applies only “for financial reasons or for lack of availability of an underwriter willing to issue a policy”, or when the limits are exhausted. It is not a choice. HHSC publishes the parent form⁠¹⁠³. An operation that fails to tell parents it has no coverage faces a recommended $50 penalty, plus $50 for each day the violation continues⁠¹. H.B. 2789 cut the required amount from $300,000 to $100,000 per occurrence for both licensed operations and listed family homes from January 1, 2026. It also dropped the annual certificate filing for listed homes⁠². The lower figure is a legal floor. A landlord, a church host or a subsidy contract can still ask for more.
• California. The insurance or bond rule in Health and Safety Code 1597.531 applies to family day care homes. A home can replace the coverage with affidavits signed by every enrolled family, which licensing reviews at each inspection. If the home is rented, the affidavit must also say the landlord’s or homeowners’ association’s insurance may not cover the daycare⁠⁴. A provider who does carry the policy must add the landlord or HOA as an additional insured if it asks in writing, the insurer does not cancel over it, and the landlord pays any extra premium⁠⁴.
• Washington. RCW 43.216.700 requires centers to show proof of “day care insurance”. On a lapse, the center must notify the state, post a notice where parents will see it, and tell parents in writing within 30 days⁠⁵. A separate 1986 law created a joint underwriting association for day care insurance. It must offer policies of at least $100,000 per occurrence, rated by “type, size and past loss experience” of the licensee⁠⁶. The state’s 2026 rule update keeps a 30-day deadline to report a terminated policy to the department⁠⁷.
• Minnesota. Until July 1, 2027, a license holder tells parents before admission whether it has liability insurance. If it does, it gives the renewal date; if not, it hands out a state form every year, and it collects a parent signature either way⁠⁸. The 2026 Legislature repealed section 142B.62, which covers all child care license holders, effective July 1, 2027. Its replacement sits in the new family child care chapter: a single state form that shows insurance status and must be re-signed when coverage changes or lapses⁠⁹. We found no replacement for centers in the 2026 act.
• Virginia. Home-based providers must tell each parent within 10 business days if coverage ends and get a written acknowledgment. Each missed notice can bring a civil penalty of up to $500⁠¹⁰.

A notice rule lowers the legal floor to zero, not the risk. Texas says so in the statute itself: going without coverage does not “indemnify the holder for damages due to negligence”⁠¹. The Texas, California, Washington, Minnesota and Virginia hubs cover each state’s wider insurance rules.

Home providers: why the homeowners policy is not enough

A family child care provider’s first question is usually whether the homeowners policy already covers the children. Regulators answer no. The Texas Department of Insurance says that because a listed family home is a business, “homeowners insurance won’t cover losses related to your home daycare”⁠³. The Maine Bureau of Insurance’s consumer guide (November 2014) says a homeowners policy “probably excludes any loss arising out of any business conducted in your home”. It adds that some insurers sell an endorsement for paid care, “usually limited to three children”⁠¹².

The same guide explains two pricing facts that apply beyond Maine:

• Licensed capacity is the exposure. It says a licensed provider’s premium “will be based on the number of children for which your facility is licensed, not the number actually receiving care”. You can save by not being licensed for more children than you serve⁠¹².
• The house itself is underwritten. It notes that most US buildings constructed before 1978 have some lead-based paint, and that many insurers will not cover older properties without a lead-safe certification. Insurers may also set stricter rules than the licensing agency on the physical environment, staff training and child-to-provider ratios, and some insist on writing both the home and the daycare⁠¹².

Abuse and molestation coverage

Child care puts staff in sole charge of young children, so an abuse allegation is a liability exposure most businesses do not carry. Markel’s published endorsement for commercial general liability, MGL 102, shows how insurers handle it: the policy covers abuse only through the endorsement, with limits of its own⁠¹³. Its terms:

• What it pays. Damages from abuse, molestation or exploitation arising from negligent hiring, training, investigation, reporting or supervision. That covers the actual, alleged or threatened abuse “by anyone” of a person in the insured’s care, custody or control. Bodily injury includes mental anguish.
• A separate pot. The endorsement has its own per-person and aggregate limits, filled in on the schedule, and they are “not considered part of” the general liability limit. Outside the endorsement, the policy provides “no coverage” for abuse, molestation or exploitation.
• Who is not covered. Anyone who takes part in the abuse, and anyone who “remains passive” after learning of abuse by an employee or volunteer. Fines, penalties and punitive damages are excluded.
• One occurrence across years. Repeated incidents involving one child over several policy periods count as one occurrence, under the limits in force at the first incident. A low limit bought years ago can therefore cap a claim made years later.

Abuse coverage is priced on its own schedule. No insurer in our data publishes what the endorsement costs. When you compare quotes, check whether the abuse limit is shown, how large it is next to the general liability limit, and whether it is per person or shared.

Workers’ comp: the official child care classes

Ohio, Washington and Wyoming run monopolistic state funds that publish the rate itself, not just a loss cost. Each treats child care differently:

Base rates set by the state fund before experience modification. Ohio and Wyoming charge per $100 of payroll; Washington charges per hour worked, and part is withheld from wages. Other states’ insurers file their own rates; see where rates are published.

• Ohio. Class 8869, “Child care center – all employees including clerical, salespersons & drivers”, puts everyone on one rate: $0.5945 per $100 of payroll from July 1, 2026. That is 12.8 times the clerical rate of $0.0466, and about a tenth of roofing’s $5.7709. In our count, 404 of Ohio’s 501 classes carry a higher base rate⁠¹⁴. Because drivers and office staff are included, a center does not split payroll.
• Washington. Washington does split. Class 6103-06 covers day care teachers, aides, nurses and office staff at $0.4289 per hour worked in 2026. Class 6104-06 covers custodians, cooks, maintenance staff and drivers at $1.0899⁠¹⁵⁠¹⁶⁠¹⁷. Making snacks with a refrigerator or microwave stays in 6103, but cooking a full menu with ovens is 6104. The rule that costs money: a worker’s hours can be split between the two classes only “if required records are maintained”. Otherwise “all hours must be reported in classification 6104”⁠¹⁶.
• Wyoming. Coverage is compulsory only for the “extrahazardous” industries listed in W.S. 27-14-108(a). The social assistance list names industry groups 6241 to 6243 but not 6244, child day care services, so a Wyoming center is not required to insure; it may elect coverage under subsection (j)⁠²⁶. Wyoming rates by NAICS sector and has no child care line. The nearest lines are 624000, Social Assistance, at $1.85 per $100 of payroll in 2026, and 611000, Educational Services, at $1.54⁠¹⁸. Both pool child care with very different work; $1.85 is about 3.1 times Ohio’s $0.5945 (our calculation).

Comp is not always mandatory. In Texas, private employers may choose whether to buy it⁠²⁴; in Wyoming, child day care is outside the compulsory list⁠²⁶. Elsewhere the employee threshold depends on the state; see the workers’ comp requirements table.

The Bureau of Labor Statistics does not publish a child care figure. Child care sits in its education and health services group. In June 2026, private employers in that group spent an average of $0.30 per hour worked on workers’ comp, or 0.6% of total compensation. The average for all private industry was $0.43⁠¹⁹.

Three worked examples (our calculations, 2026 official rates, not quotes)

1. Ohio center, $600,000 of payroll

   $600,000 ÷ 100 × $0.5945 = $3,567.00 a year at the base rate⁠¹⁴. With a 1.15 experience modification, that becomes $4,102.05; with 0.80, $2,853.60. Any Ohio account whose premium falls below $120 pays the $120 minimum administrative charge instead⁠²⁵.

2. Washington center, with records kept

   Ten teachers and aides work 18,000 hours: 18,000 × $0.4289 = $7,720.20. One cook works 1,800 hours: 1,800 × $1.0899 = $1,961.82. The total is $9,682.02, of which $3,038.13 may be withheld from wages as the worker share⁠¹⁵.

3. The same Washington center, without records

   All 19,800 hours go to 6104: 19,800 × $1.0899 = $21,580.02, or $16,781.49 after the $4,798.53 worker share⁠¹⁵⁠¹⁶. Not keeping hours by class raises this center’s own share by $10,137.60 a year ($16,781.49 against $6,643.89).

The class code guide explains how insurers in other states assign codes. The workers’ comp estimator runs the same arithmetic.

What insurers report for daycares

Only ERGO NEXT publishes daycare figures in our dataset:

Insurer- and broker-reported figures from each company’s own customers, as published on its website; not a random sample of all businesses. Figures are rounded as published.

These are averages for NEXT’s own daycare customers, data updated April 2026⁠²⁰⁠²¹. NEXT does not say how many are centers and how many are home providers. The disclosure on its comp page refers to commercial property buyers, apparently a copy error⁠²¹. Two other published figures are much lower, and neither measures the same thing:

• NEXT’s own daycare cost page, with data “updated in September 2022”, says general liability costs “67% of our customers” $56 to $78 a month. It quotes per-occurrence limits of $500,000 to $1 million⁠²². That is a range for most customers, three and a half years older, not an average; an average can be pulled up by a few large accounts. The page’s “as little as $20.83 per month” is a Texas workers’ comp minimum premium, not a liability price⁠²².
• Insureon’s undated daycare page lists general liability at $91 a month, a business owner’s policy at $135 and professional liability at $99. It labels these “average human and social services insurance costs”, so the group covers more than child care⁠²³.

None of these figures says whether abuse and molestation coverage was included, or at what limit. A quote for a 120-child center and a quote for a six-child home may each fall far from all three.

Vans, field trips and the building

• Transport. Washington requires a program vehicle that carries children to have “a current insurance policy that covers the driver, the vehicle, and all occupants”⁠⁷. Texas’s liability rule already reaches a child “in the care of the holder” off the premises⁠¹. A center that owns a van needs commercial auto. Staff driving their own cars on field trips raise a hired and non-owned auto exposure.
• Property. A center that owns or leases its building insures it, the kitchen and the play equipment separately from liability. Many small centers buy the two together as a business owner’s policy. A center run by a nonprofit or a congregation may face board-level exposures as well; see nonprofits.

A budget built from the rules up

No published source gives a total insurance cost for a child care business. You can still build a checkable figure:

1. Start from your license

   Find your state’s rule for your license type (center, family home, group home) and its minimum limit. Then add any higher limits your lease, host church or subsidy contract requires.

2. Price liability on licensed capacity

   Ask each insurer whether it rates on licensed capacity or enrollment, and what abuse and molestation limit it includes⁠¹²⁠¹³.

3. Split payroll the way your state does

   One class in Ohio; teachers apart from cooks and drivers in Washington, with hours records kept⁠¹⁴⁠¹⁶. Apply the official rate, or in other states ask for the class code, rate and loss-cost multiplier the insurer used.

4. Add vehicles and property on their own bases

   Vehicles and drivers for auto; building and contents values for property.

5. Keep the disclosure paperwork either way

   In Minnesota and Virginia the parent notice is required whether or not you buy insurance; in Virginia each missed notice can bring a civil penalty of up to $500⁠⁸⁠¹⁰.

The premium calculation guide covers each step; general liability explains limits and additional-insured endorsements.

Sources

1. 1
   Texas Legislature, Human Resources Code chapter 42, Regulation of certain facilities, homes, and agencies that provide child-care services Checked 13 Oct 2026 · Back to text ↑
2. 2
   Texas Legislature, H.B. 2789, enrolled version (89th Legislature, Regular Session) Checked 13 Oct 2026 · Back to text ↑
3. 3
   Texas Department of Insurance, Do I need insurance to run a daycare in my home? Checked 13 Oct 2026 · Back to text ↑
4. 4
   California Legislative Information, Health and Safety Code 1597.531 Checked 13 Oct 2026 · Back to text ↑
5. 5
   Washington State Legislature, RCW 43.216.700, Day care insurance Checked 13 Oct 2026 · Back to text ↑
6. 6
   Washington State Legislature, RCW 48.88.050, Policies, liability limits, rating plan Checked 13 Oct 2026 · Back to text ↑
7. 7
   Washington State Legislature, WAC chapter 110-300, Foundational quality standards for early learning programs Checked 13 Oct 2026 · Back to text ↑
8. 8
   Minnesota Office of the Revisor of Statutes, Minnesota Statutes 142B.62, Child care license holder insurance Checked 13 Oct 2026 · Back to text ↑
9. 9
   Minnesota Office of the Revisor of Statutes, Laws of Minnesota 2026, chapter 127, article 13 (family child care licensing modernization) Checked 13 Oct 2026 · Back to text ↑
10. 10
    Virginia General Assembly, Code of Virginia 22.1-289.050, Insurance notice requirements for home-based child care Checked 13 Oct 2026 · Back to text ↑
11. 11
    Virginia General Assembly, 8VAC20-800-70, Written information for parents (licensed family day homes) Checked 13 Oct 2026 · Back to text ↑
12. 12
    Maine Bureau of Insurance, A consumer guide to child care liability insurance (November 2014) Checked 13 Oct 2026 · Back to text ↑
13. 13
    Markel Insurance Company, MGL 102 (10/09), Abuse or molestation coverage endorsement Checked 13 Oct 2026 · Back to text ↑
14. 14
    Ohio Bureau of Workers' Compensation / Ohio Administrative Code, OAC 4123-17-06, Appendix A: base rates effective July 1, 2026 (private employers) Checked 13 Oct 2026 · Back to text ↑
15. 15
    Washington State Department of Labor & Industries, 2026 hourly rates by risk classification Checked 13 Oct 2026 · Back to text ↑
16. 16
    Washington State Legislature, WAC 296-17A-6103, Classification 6103 Checked 13 Oct 2026 · Back to text ↑
17. 17
    Washington State Legislature, WAC 296-17A-6104, Classification 6104 Checked 13 Oct 2026 · Back to text ↑
18. 18
    Wyoming Department of Workforce Services, Workers' compensation 2026 industry base rates by classification Checked 13 Oct 2026 · Back to text ↑
19. 19
    U.S. Bureau of Labor Statistics, Employer Costs for Employee Compensation, June 2026 (released Sept. 9, 2026) Checked 13 Oct 2026 · Back to text ↑
20. 20
    ERGO NEXT, How much does general liability insurance cost? (data updated April 2026) Checked 13 Oct 2026 · Back to text ↑
21. 21
    ERGO NEXT, How much does workers' comp insurance cost? (data updated April 2026) Checked 13 Oct 2026 · Back to text ↑
22. 22
    ERGO NEXT, Daycare insurance cost (data updated September 2022) Checked 13 Oct 2026 · Back to text ↑
23. 23
    Insureon, Daycare and preschool insurance Checked 13 Oct 2026 · Back to text ↑
24. 24
    Texas Legislature, Texas Labor Code chapter 406, Workers' compensation insurance coverage Checked 13 Oct 2026 · Back to text ↑
25. 25
    Ohio Bureau of Workers' Compensation / Ohio Administrative Code, OAC 4123-17-26, Minimum administrative charge Checked 13 Oct 2026 · Back to text ↑
26. 26
    Wyoming Legislature, Wyoming Statutes title 27, W.S. 27-14-108, Extrahazardous industries; optional coverage Checked 13 Oct 2026 · Back to text ↑

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