Best Daycare Business Insurance

The Hartford secures our top spot for daycare center insurance with perfect scores across coverage options and affordability. Its coverage packages and cost-effective rates set them apart in the childcare insurance market. 

You should also get quotes from our other recommended carriers, including NEXT, biBerk, Simply Business, and Progressive Commercial, before making your final decision.

*We based all scores on a daycare business with two employees across professional liability, general liability, workers' comp and BOP policies.

The Hartford leads daycare insurance affordability at $43 monthly, offering the cheapest business owner's policy and general liability coverage. But NEXT provides more affordable workers' compensation at just $13 monthly, making it worth considering for this specific coverage type.

In general, daycare business insurance costs are the following for the four most popular coverage types:

• General Liability: $33 on average per month, ranging from $29 to $46, depending on the state
• Workers' Compensation: $13 on average per month, ranging from $11 to $16, depending on the state
• Professional Liability: $108 on average per month, ranging from $92 to $125, depending on the state
• Business Owners' Policy Insurance: $49 on average per month, ranging from $41 to $56, depending on the state

Most childcare centers need general liability and property insurance as their foundation, while workers' compensation, professional liability, and abuse and molestation coverage are typically required to meet state licensing requirements and protect against industry-specific risks.

Below are the essential coverage types and recommended policy limits specifically tailored for daycare and childcare operations:

• General liability insurance: Provides protection against third-party bodily injury and property damage claims which is critical when caring for active children who may fall on playgrounds or accidentally damage parents' belongings. We recommend $1 million per occurrence and $2 million aggregate for home-based daycares, or $2 million per occurrence and $3 million aggregate for commercial childcare centers to adequately protect against common risks like playground injuries and parent slip-and-falls.
• Workers' compensation insurance: Legally required in most states when you have employees, this coverage pays medical expenses and replaces lost wages when staff members suffer work-related injuries, such as back strains from lifting toddlers, knee injuries from kneeling during activities, or slip-and-fall accidents during outdoor supervision. Coverage amounts are determined by your state and payroll size.
• Professional liability insurance (errors & omissions): Shields your childcare business from allegations of inadequate supervision, failure to administer medication properly, or lapses in following safety protocols. A minimum of $1 million per occurrence or $1 million aggregate is recommended for small daycares, while larger facilities should consider $2 million in coverage to handle potential negligence claims and meet contract requirements.
• Business property insurance: Covers your facility's physical assets including playground equipment, educational supplies, furniture, technology, and the building itself (if owned). For home-based daycares, we recommend $15,000 to $25,000 in contents coverage, while commercial centers typically need $50,000 to $150,000 depending on facility size and equipment value.
• Commercial car insurance (if applicable): Essential when your daycare owns vehicles for field trips or provides transportation services. A $1 million combined single limit (CSL) with comprehensive and collision coverage is the industry standard for childcare transportation, protecting against accidents during school pickups, field trips, and daily operations.
• Abuse and molestation coverage: This specialized protection is increasingly required by state licensing boards and provides crucial defense against allegations of child abuse, molestation, or inappropriate conduct by staff members. We recommend minimum coverage of $1 million per occurrence and $2 million aggregate, though facilities in high-litigation states or those caring for many children should consider $2 million per occurrence limits to ensure adequate protection for both legal defense costs and potential settlements.

Follow this approach to secure comprehensive yet cost-effective insurance coverage for your daycare or childcare center.

The Hartford leads our rankings for daycare and childcare center insurance, delivering comprehensive coverage specifically designed for the unique risks of caring for children. We also recommend requesting quotes from NEXT, biBERK, and Simply Business to ensure you're getting the best protection for your facility. To secure optimal coverage at competitive rates, connect with insurance agents experienced in childcare operations, speak with other daycare owners about their experiences, research typical costs for facilities similar to yours, and compare quotes from at least three specialized providers before making your decision.

We answer frequently asked questions about daycare business insurance:

We selected the best business insurer for daycare companies based on the following criteria:

• Affordability (50% of score): The lower a company's costs compared to the competition based on our base profile for four core coverage types, the better the company performs.
• Customer service (30% of score): We scored providers on overall customer satisfaction using industry studies, customer review forum ratings and public forum sentiment analysis from sites like Reddit.
• Coverage (15% of score): We scored business insurance providers for this category based on the flexibility, payment and actual coverage options.
• Financial stability (5% of score): Using financial stability industry ratings from companies like AM Best and Moody's, we created an overall rating to judge how likely companies are to pay out claims compared to the competition.

All pricing in this article is based on the following base profile to represent the vast majority of small businesses in all states:

• Three-person business with two employees
• Coverage: $1 million per occurrence and $2 million total per year for all but BOP, which includes the same coverage plus $5,000 of business property coverage
• $150,000 in payroll
• $300,000 annual revenue