Daycare Insurance: Cost & State Requirements

Last updated: August 17, 2026

Whether daycare insurance is legally required depends on which state licenses you — and the answers range from a hard dollar minimum to no rule at all. Kentucky will not issue a licence without written proof of $100,000 per occurrence. Texas requires the same $100,000 — a 2025 law cut it from $300,000. Pennsylvania demands the policy itself be on file. Tennessee mandates a four-coverage stack — $500,000 general liability for centers plus abuse-and-molestation coverage — and Washington, D.C. goes further still, adding an umbrella to the same demand. Arkansas scales its floor to capacity ($500,000, doubling at 75 children); Mississippi asks $300,000/$500,000 with annual proof; Oklahoma benchmarks $200,000 and makes uninsured facilities post the fact at the front door; Wisconsin sets $25,000/$75,000 — pets included on the certificate. Illinois and Washington set $100,000 floors for centers; New York, Nevada, Kansas, Nebraska, Arizona, Delaware, Idaho, New Jersey, Louisiana and North Dakota demand proof of coverage without naming a number. South Carolina, Utah, New Hampshire, New Mexico, Georgia, Minnesota, Virginia’s family homes and California’s let you go uninsured only if you tell every parent in writing, and West Virginia makes your coverage an enrollment disclosure either way. Missouri, Alabama, Colorado, South Dakota, Alaska, Connecticut, Iowa, Maryland, Michigan and Wyoming ask for nothing, Indiana and North Carolina insure only the vehicles, and Oregon is in active rulemaking that may change its answer. The coverage everyone ends up buying is the same four-part stack; the law only decides who gets to skip it on paper.

What Each State Actually Requires

These are the licensing rules as verified against each state’s own regulations in August 2026 — each state page carries the citations.

State	Liability insurance rule
Kentucky	Required — ≥$100,000 per occurrence, written proof to get and keep the licence
Texas	Required — $100,000 per occurrence (cut from $300,000 by HB 2789); written parent notice if coverage is unobtainable
Illinois	Required — $100,000 per occurrence for centers (Rule 407) and group homes (Rule 408); small homes exempt
Washington	Required for centers — $100,000+ per occurrence, proven at licensure, renewal AND inspection; family homes opt out only with written parent notice
Tennessee	Required — the fullest stack in the US: $500k/$500k GL for centers ($300k homes), $5k med-pay, $500k auto CSL, AND $100k/$300k abuse & molestation coverage (Rule 1240-04-01-.05(4))
Arkansas	Required — scaled to capacity: $500,000/occurrence (1–74 children), $1,000,000 (75+), verified BEFORE approval
Mississippi	Required — $300,000/occurrence + $500,000 aggregate, annual proof; tax-exempt facilities exempt
Oklahoma	Required — $200,000 benchmark (10 O.S. §404.3); uninsured facilities POST an exception notice at the entrance + signed annual parent forms
Wisconsin	Required — $25,000/person + $75,000/occurrence (DCF 251); pets must be shown covered on the certificate
Pennsylvania	Required — comprehensive general liability, policy on file, claims reported to DHS
New York	Required for centers — GL certificate with the application, policy on file after licensure (18 NYCRR 418-1.15(c)(28))
Nevada	Required — liability policy with certificate filed with the state; insurer must pre-notify cancellation (NAC 432A.290(2)); no dollar minimum
Kansas	Required — accident AND liability insurance on file BEFORE care begins (K.A.R. 28-4-426(c))
Nebraska	Required for all five licence types — evidence of adequate coverage with the DHHS application
Arizona	Required — certificate for licensure, coverage described in your policies, documentation reviewable on premises (R9-5-308)
Delaware	Required — comprehensive GL, certificate due by the pre-licensing visit and at every renewal (DELACARE)
Washington, D.C.	Required — the fullest stack: CGL + umbrella follow-form + abuse & molestation + vehicle liability, documented on-site (5A DCMR)
Idaho	Required — proof of liability AND fire insurance with the state application (7+ children; smaller providers answer to city rules)
New Jersey	Required — comprehensive general liability for licensed centers (N.J.A.C. 3A:52-3.4)
Louisiana	Required — commercial liability to operate (Bulletin 137 §1503); dollar minimums repealed; self-insurers file a notarized affidavit
North Dakota	Required for facility-based programs — bodily injury + property damage; WC only from the WSI state fund
Ohio	Certificates collected at licensing (liability, property, auto if transporting); workers’ comp only from the state BWC fund
Florida	Not a licence condition — but $100,000/$300,000 required for School Readiness providers, which most centers are
South Carolina	Insurance or written notice to every parent, verified at a 30-day DSS records review
Utah	Insurance or written parent disclosure — stated twice, for general liability and for transport
West Virginia	Coverage information is a mandatory enrollment disclosure to every parent (78 CSR 1)
New Hampshire	Insurance or written disclosure at enrollment that the program is uninsured (He-C 4002, re-adopted Aug 2025)
New Mexico	Insurance or handbook disclosure — an uninsured licensee’s parent handbook must say so (8.16.2 NMAC, centers and homes)
California	Family homes: $100k/$300k insurance OR $300k bond OR signed parent affidavits (H&S §1597.531); centers have NO Title 22 mandate
Georgia	Insurance or written parent notice — an uninsured center notifies every enrolled child’s parents and retains the notices (DECAL 591-1-1)
Minnesota	The most elaborate disclosure regime: written status notice BEFORE admission, expiration dates disclosed, annual uninsured form (§245A.152)
Virginia	Family homes: insure or notify before the first day — and within 10 business days of a lapse; centers have no mandate
Massachusetts	Vehicle liability mandated for transport (606 CMR 7.13(5)); general liability not a numbered licensing rule
Indiana	No general liability mandate — only transport vehicles must be insured (470 IAC 3-4.7)
North Carolina	Vehicle liability required for transport (DCDEE); facility GL recommended, not mandated
Oregon	No current mandate — active DELC rulemaking (Liability Insurance Workgroup, 2026)
Missouri	No licensing mandate — leases, lenders and subsidy contracts require it instead
Alabama	No mandate — 100 pages of Minimum Standards, zero insurance requirements
Colorado	No center mandate — the “every facility” rule belongs to camps; centers must verify field-trip drivers’ coverage
South Dakota	No mandate — and workers’ comp is optional too: the double-optional state
Connecticut	No current mandate — but actively being written: HB 5160 proposed a $100,000 minimum; OEC cost report delivered June 2026
Alaska	No state mandate (7 AAC 57) — but Anchorage licenses child care under its own municipal program
Iowa	No mandate — 441 IAC ch. 109 contains no insurance requirement
Maryland	No mandate — COMAR 13A.16 contains none, despite what guides claim
Michigan	No mandate in the 2025 center rules — but each uninsured WC day is a separate misdemeanor
Wyoming	No GL mandate — but the licence writes workers’ comp in, sold only by the state fund

The Four Coverages, and What Actually Drives the Premium

• General liability with abuse & molestation coverage. The premises claim (a fall, a burn, an allergic reaction) and the allegation are different exposures; A&M cover is the daycare-specific part, and quotes differ most on whether it’s included or bolted on.
• Commercial auto — priced per vehicle; a personal policy excludes business transport of children entirely.
• Workers’ compensation — required in most states from the first employee. In Ohio, North Dakota, Washington and Wyoming it comes only from the state fund, never a private carrier.
• Property — the build-out, playground equipment and contents.

The premium drivers are licensed capacity, whether you transport, infant care (higher exposure than preschool), claims history, and the state’s litigation climate. That’s why a quote is the only real price — the same center is priced differently across a state line.

Frequently Asked Questions

Is daycare liability insurance required by law?

It depends entirely on the state. Kentucky requires written proof of at least $100,000 per occurrence to hold a licence; Texas requires $100,000 (reduced from $300,000 in 2025); Pennsylvania requires comprehensive general liability with the policy on file; Tennessee and Washington, D.C. mandate abuse-and-molestation coverage on top of general liability; Arkansas scales its floor to capacity ($500,000 to $1,000,000); Mississippi requires $300,000/$500,000 with annual proof; Oklahoma benchmarks $200,000; Wisconsin sets $25,000/$75,000; Illinois and Washington set $100,000-per-occurrence floors for centers; New York, Nevada, Kansas, Nebraska, Arizona, Delaware, Idaho, New Jersey, Louisiana and North Dakota require proof of coverage without naming a dollar amount. South Carolina, Utah, New Hampshire, New Mexico, Georgia, Minnesota, Virginia (family homes) and California (family homes) allow a provider to skip insurance only by notifying every parent in writing, and West Virginia makes coverage information a mandatory enrollment disclosure. Missouri, Indiana, North Carolina, Alabama, Colorado, South Dakota, Alaska, Connecticut, Iowa, Maryland, Michigan, Wyoming and Oregon have no general-liability licensing mandate at all — though Oregon is actively considering one.

What insurance does a daycare need?

Four coverages recur everywhere: general liability with abuse and molestation coverage, commercial auto for any vehicle transporting children, workers’ compensation once staff are employed, and property coverage for the build-out and equipment. State rules decide which are legally mandatory; enrollment contracts, landlords and subsidy programs usually require the rest.

Why does daycare insurance need abuse and molestation coverage?

Because a standard general liability policy can exclude allegations of abuse — the single claim category most specific to child care. Abuse & molestation coverage responds to those allegations, including defense costs. A daycare policy without it leaves the business exposed on exactly the claim it is most likely to be judged on.

Starting the daycare itself? Every state’s licensing walkthrough is in our state-by-state guides — staffing ratios, background checks, facility rules and costs.

Hiring your first employee? Our workers’ comp requirements by state table covers every state’s threshold, who counts toward it, and the four monopolistic state funds.