Does homeowners insurance cover home daycares?

It provides some protection, but you’ll want to take out additional at-home daycare insurance coverage to ensure you’re fully protected in case a child is injured in your care.

Kara McGinley

By

Kara McGinley

Kara McGinley

Editor & Licensed Home Insurance Expert

Kara McGinley is an editor and licensed home insurance expert at Policygenius, where she writes about homeowners and renters insurance. As a journalist and as an insurance expert, her work and insights have been featured in Kiplinger, Lifehacker, MSN, WRAL.com, and elsewhere.

Updated|3 min read

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Home daycares can be a lucrative and fulfilling business, but they come with their fair share of risk. And your standard homeowners insurance policy doesn’t offer all of the coverage you need in case an accident happens on your watch.

That’s where a home daycare insurance endorsement comes in. Many insurers let you add this additional liability and property coverage to your standard home insurance policy to extend protection to children in your care in the event of an accident.

Key Takeaways

  • Standard homeowners insurance policies don’t provide adequate coverage for at-home daycares.

  • Many insurance companies let you add additional home daycare protection to your home insurance policy to extend protection to children in your care.

  • Home daycare insurance can cost anywhere from $400 to over $1,000 annually — it all depends on where you live and the coverage you sign up for.

Does homeowners insurance cover my home daycare?

No, a standard homeowners insurance policy does not extend liability coverage to businesses that operate on your property, such as a home daycare. Even though most homeowners insurance policies offer up to $2,500 for home business property protection, this doesn’t include protection for personal liability.

This means if a child is hurt while in your care and you’re sued for damages, you’ll have to pay for any medical and legal bills that arise out of your own pocket.

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What is home daycare insurance?

Home daycare insurance is a special type of home business insurance that many carriers allow you to add on to your standard home insurance policy for an additional fee. This endorsement extends liability coverage to your business so you’re not personally responsible for damages if a child has an accident while in your care.  

To qualify for a home daycare endorsement with most home insurance carriers, you typically can’t have more than three to six children in your care — though it varies by insurer. If you run a larger daycare, you’ll likely need to take out a separate commercial insurance policy instead.

What does home daycare insurance cover?

Home daycare insurance policies vary by company, though you’ll typically have a mix of property and liability coverage options. These typically include:

  • General liability coverage. Protects you from lawsuits and expensive medical bills if a child is injured while in your care, including accidents that happen on the playground, while using educational materials, or while on furniture in your home.

  • Accident medical coverage. Covers the medical bills of any children injured in your care if their parent’s health insurance doesn’t cover the full cost 

  • Professional liability coverage. Protects your business from lawsuits due to negligence, like if one of your daycare staff accidentally gives a child in your care peanuts who’s allergic and their parent sues you for damages.

  • Commercial auto liability coverage. Protects you in the event of an accident while transporting children in your care.

  • Corporal punishment liability coverage. Helps pay for legal fees if one of your daycare staff members spanks or hits a child in your care, and the parent sues you for damages.

  • Abuse and molestation liability coverage. Covers legal fees and any judgments against your business if you or a staff member are found guilty of abuse.

  • Error and omissions liability coverage. Also called malpractice insurance, this protects you if you’re accused of malpractice and you’re found legally responsible for damages.

  • Umbrella liability coverage. Extends liability coverage limits beyond the typical maximum provided by standard daycare insurance policies.

  • Property coverage. Covers damage to property explicitly used for your daycare, like playground equipment and educational supplies.

Who needs home daycare insurance?

Most states require all at-home daycare businesses with a minimum number of children in their care to have insurance in order to meet licensing requirements. The specifics of the type of insurance and coverages you’ll need vary depending on your state and the size of your daycare.

In general, you’ll likely need a home daycare insurance policy if you run any of the following types of businesses:

  • Before- or after-school childcare program

  • Preschool program

  • Religious or non-profit daycare center

  • Summer day camp

You can find a complete list of insurance requirements for home daycares in your state by visiting the National Database of Child Care Licensing Requirements.

How much does home daycare insurance cost?

Home daycare insurance can cost anywhere from $400 to $1,000 annually — it all depends on a few factors, including:

  • Where your at-home daycare is located

  • The number of employees you have

  • The number of children you care for

  • The specific types of coverages and limits you add to your policy

For example, Next Insurance reports that most of its customers pay an average of $646 annually — or $54 a month — for general liability insurance for their at-home daycares. However, that cost increases anywhere from 4% to 8% after adding professional liability coverage to the policy. 

5 companies that offer home daycare insurance

If you’re looking to sign up for at-home daycare insurance, you might want to start by comparing quotes from these companies:

  • American Family Insurance

  • Assure Childcare

  • JMG Insurance Agency

  • Markel Insurance

  • Next Insurance

Don’t have time to crunch the numbers yourself? No sweat! Our team of licensed insurance agents at Policygenius can do the work for you. 

All you have to do is answer a few questions about yourself and your home, and an insurance agent will get in touch to help you compare quotes to find the best deal available. They’ll even fill out all of the paperwork for you — so all you have to do is sign on the dotted line for coverage to be yours.

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Additional insurance to consider for your home daycare

If you're worried that daycare insurance doesn't offer enough protection, you may want to consider adding supplemental insurance to your policy, including:

Workers compensation

If you have employees that work at your home daycare, you may want to consider workers compensation insurance. Workers compensation covers the cost of lost wages and medical expenses if an employee is injured on the job.

Loss of income insurance

Loss of income insurance can help pay employee salaries and business expenses if your daycare is forced to temporarily close due to a covered incident.

Frequently asked questions

Does homeowners insurance cover home daycares?

Most standard homeowners insurance policies only cover up to $2,500 in business-related property damage — and exclude liability coverage entirely for at-home businesses. This means you’d have to pay for any medical or legal bills out of pocket if a child were injured while in your care and their parents sued you for damages.

How much does home daycare insurance cost?

Home daycare insurance can cost anywhere from $400 to over $1,000 annually — it all depends on where your at-home daycare is located, the number of employees you have, how many children you care for, and the specific types of coverages and limits you add to your policy.

Do all at-home daycares need insurance?

Whether you need at-home daycare insurance depends on your state's licensing requirements. However, most experts recommend any at-home daycare business have general liability coverage to protect you from expensive medical bills and lawsuits in the event that a child is injured while in your care.