How Much Does Daycare Insurance Cost in 2026?

What is daycare insurance, and does your business need it?

Daycare insurance is not one policy. It is a package built from several coverages: general liability for injuries and property damage, professional liability (sometimes called educator's legal liability) for claims of negligent supervision or care, property coverage for your building and equipment, workers compensation once you have staff, and abuse and molestation liability, which most general policies limit sharply or exclude.

Any business that supervises children for pay needs some form of it, whether that is a licensed in-home family day care with a handful of kids or a multi-classroom day care center with a full staff. The right combination of coverage depends heavily on your size and license type.

How much does daycare insurance cost?

Cost scales with your license type and staff size more than almost any other factor. A small, in-home family day care pays far less than a licensed center with a dozen employees and a building full of children.

Estimates only. Exact premium depends on enrollment, staff count, building construction, location, and loss history, and is confirmed by a producer during quoting.

Workers compensation is priced per employee, typically $200 to $900 a year per staff member depending on payroll and claims history. A standalone abuse and molestation policy commonly runs $400 to $700 a month on its own, which is why most centers fold it into a package instead of buying it separately.

What does daycare insurance cover?

General liability covers a child's slip-and-fall or a parent's property damage claim. Professional liability responds to claims of negligent supervision or improper care, the kind of claim general liability will not pick up. A business owners policy bundles general liability with property coverage for your building, toys, and equipment, plus lost income if a covered event shuts you down. Once you hire staff, Illinois requires workers compensation, and if your program transports children, you need commercial auto coverage on top of a personal policy.

Claims that exceed your general liability or professional liability limits are where a commercial umbrella policy comes in, adding a layer of protection over your core coverage for a relatively small added cost.

Illinois licensing rules: how much liability insurance is required

Illinois sets specific minimums depending on your license type. Day care centers must carry at least $300,000 per occurrence in public liability insurance before DCFS will approve them, under 89 Ill. Adm. Code 407.70(l). Group day care homes need at least $100,000 per occurrence under 89 Ill. Adm. Code 408.35(j). Day care homes, the smallest family-based license category, carry no facility liability dollar minimum in the licensing standards, though we still recommend coverage given the exposure.

Workers compensation is separate from these liability minimums and is required the moment you have your first employee, including part-time staff. Illinois enforces this with daily penalties for noncompliance and a $10,000 minimum fine, so it is not something to defer once you are staffed.

The coverage gap most daycares miss: abuse and molestation liability

This is the coverage that catches operators by surprise. Many general liability and even professional liability policies quietly cap abuse and molestation claims at a fraction of the main policy limit, or exclude them entirely. For a business supervising children, that is the single highest-severity claim you can face, and it is exactly where a sublimit does the most damage. We place abuse and molestation insurance at full limits, not buried sublimits, which is the detail worth checking on any policy you are quoted.

Does homeowners insurance cover a home daycare?

No, not in any meaningful way. A standard homeowners policy is written for personal, not business, use, and most carriers exclude business activity entirely or cap it at a token amount that will not cover a real claim. If you run or are considering a home-based day care, you need a dedicated business policy, not an endorsement stapled onto your homeowners coverage.

How Pro Insurance Group helps

We are an independent brokerage, so we are not limited to one carrier's day care program. We shop 20+ carriers to build a package that meets your license type's Illinois minimums, closes the abuse and molestation gap most generic policies leave open, and adds workers comp and umbrella coverage as you grow. There are no broker fees, and we handle the paperwork end to end. We also issue certificates of insurance quickly when a landlord, church host site, or licensing agency needs proof of coverage.

Frequently asked questions