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Texas just cut its daycare insurance mandate by two-thirds. Licensed centers were required to carry $300,000 per occurrence; House Bill 2789 (2025) reduced the requirement to $100,000 per occurrence of negligence, with implementing rules due by December 1, 2025 — so 2026 applicants license under the lower number. Providers who can’t obtain coverage must tell every parent in writing before admitting a child.
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What Texas Actually Requires
| Coverage | Texas requirement |
|---|---|
| General liability | $100,000 per occurrence of negligence — 26 TAC § 745.249 (was $300,000 before HB 2789) |
| Proof | Annual proof to Licensing by the permit anniversary; Form 2962 verifies parent notice |
| No coverage? | Written notice to the parent of each child BEFORE admitting the child |
The 2026 Number Is $100,000 — Cite It Correctly
Most guides online still say $300,000, because that was the rule for years. HB 2789 rewrote Human Resources Code § 42.049 and the rule at 26 TAC § 745.249 now reads $100,000 per occurrence. The parent-notification escape hatch survived: a provider that cannot obtain coverage — the statute contemplates genuine unavailability, not preference — must notify each family in writing first. Keep the Form 2962 verification with your records; Licensing evaluates compliance at § 4600 of the CCR handbook.
The Coverages Every Daycare Carries Regardless
- General liability with abuse & molestation coverage. The playground injury and the allegation are different claims; a daycare policy without A&M cover is missing the exposure the business is actually judged on.
- Commercial auto if you transport children — a personal policy excludes business use.
- Workers’ compensation once you employ staff.
- Property and contents for the build-out, equipment and food stock.
Parents ask if you’re insured. So do licensors.
A certificate of insurance answers both in one page. Quotes are free and don’t require a phone call.
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Frequently Asked Questions
How much liability insurance does a Texas daycare need in 2026?
$100,000 for each occurrence of negligence, under 26 TAC § 745.249 as amended after House Bill 2789 (2025). The long-standing $300,000 figure is out of date. Proof goes to Licensing annually by the permit anniversary date.
What if a Texas provider can’t get liability insurance?
The provider must notify the parent of each child in writing before admitting the child, and be able to demonstrate the notice was given — Form 2962, Verification of Liability Insurance, documents it.
Comparing states? See daycare insurance requirements in every state, or the full guide to starting a daycare in Texas.
Sources
| Source | What it confirms |
|---|---|
| 26 TAC § 745.249 | $100,000 per-occurrence requirement |
| Tex. Hum. Res. Code § 42.049 | Statutory basis, as amended by HB 2789 (2025) |
| HHSC CCR Handbook § 4600 | How compliance is evaluated; parent-notice rules |
