Daycare Insurance: Cost & State Requirements

Last updated: October 2, 2026

Daycare insurance requirements depend on your state and license category. Nebraska requires at least $100,000 per occurrence; Kansas centers need accident and liability insurance before care begins. New York OCFS centers maintain general liability records, while NYC group centers use a different permit framework. Georgia and Minnesota have insurance-disclosure requirements that should be checked for the specific program. Use the state guides below to compare the applicable rules with the coverage, exclusions and limits in your quote. Licensing evidence, employee coverage and insurance requirements in a lease are separate questions.

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 license
Texas	Required — $100,000 per occurrence (cut from $300,000 by HB 2789); written parent notice if coverage is unobtainable
Illinois	Required — $300,000 per occurrence for centers (Rule 407) and $100,000 for 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	Centers/drop-in centers: $500,000 per occurrence and aggregate general liability; family/group homes: $300,000/$300,000. Also $5,000 operational medical payments and $100,000/$300,000 abuse coverage. Transport adds applicable $500,000 center or $300,000 home auto CSL and $5,000 child medical payments; qualifying self-insurance provisions apply (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	At least $200,000 for each occurrence of negligence under 10 O.S. §404.3, with specified exceptions. An exception requires Department notification, a posted notice and signed parent records; program parent notifications recur every 12 months.
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	OCFS centers must keep general liability insurance records, including the policy issued after licensure (18 NYCRR 418-1.15(c)(28)). NYC group centers use a different permit framework; confirm the program category.
Nevada	Required — liability policy with certificate filed with the state; insurer must pre-notify cancellation (NAC 432A.290(2)); no dollar minimum
Kansas	Centers must obtain accident and liability insurance and keep documentation on file before care begins (K.A.R. 28-4-426(c)). Confirm separate requirements for home programs.
Nebraska	At least $100,000 per occurrence, with written proof before licensing and coverage maintained whenever children are in care (§71-1911.03).
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	Homes: $100k/$300k OR JFS 01933 waiver; centers: no published GL dollar floor in DCY rules (auto/WC separate)
Florida	$100,000 per occurrence/$300,000 aggregate under standard School Readiness and private VPK provisions, subject to specified exceptions and authorized lower limits; transportation coverage when applicable.
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	DECAL provides a no-liability parent acknowledgment and requires applicable posted notices. Family-home guidance specifies written notification and a signed acknowledgment in the child’s file; confirm the process for your program.
Minnesota	Written insurance-status notice before admission; annual notice if uninsured. An unchanged continuous policy can use the initial notice with its renewal date until coverage changes or lapses (§142B.62, applicable at this September 2026 review).
Virginia	Family homes: insure or notify before the first day — and within 10 business days of a lapse; centers have no mandate
Massachusetts	EEC vehicle injury limits: $100,000/person and $300,000/accident. Its older $5,000 property figure must be read with the current $30,000 auto-law floor for policies issued or renewed from July 1, 2025.
Indiana	Centers must carry liability (470 IAC 3-4.7-20); owned/leased center vehicles also insured
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	The DHR center and home standards reviewed do not set a blanket facility general-liability dollar minimum. Confirm program and contract requirements separately; workers’ compensation and vehicle coverage are different questions.
Colorado	No center mandate — the “every facility” rule belongs to camps; centers must verify field-trip drivers’ coverage
South Dakota	Required except family day care (ARSD 67:42:17:43); WC optional under SD law: 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); Anchorage purchase rule repealed 7/15/2025 — disclosure under 16.55.160
Iowa	The reviewed center and child-development-home chapters do not set a blanket general liability dollar minimum. Confirm program and contract requirements; employee and vehicle coverage are separate questions.
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	Liability status must be disclosed to parents; no-coverage notice requires signed acknowledgment retained in the child’s record. Transport vehicles must cover the children. Workers’ compensation depends on applicable classifications and coverage route.
Hawaii	Liability required under HRS §346-157; annual proof and parent notice within seven working days of coverage changes. Confirm program-specific limits.
Maine	Facilities: $100,000/person, $300,000/occurrence and $5,000 property damage; certificate before licensing. Home-provider licensing differs; review homeowners/business coverage.
Montana	Public liability and fire insurance; DPHHS verification addresses insured capacity, overlap children and rented-building fire coverage. Confirm the program’s requirements.
Rhode Island	Liability required for licensed centers/school-age programs and family homes; no single dollar floor stated in these provisions. Transportation insurance addressed separately.
Vermont	Centers and family homes must carry liability insurance of a reasonable amount and provide evidence; applicable transportation coverage is separate. No universal dollar minimum stated.

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 on the state and program type. Nebraska requires at least $100,000 per occurrence, and Kansas centers need accident and liability coverage before care begins. New York OCFS centers must maintain general liability records. Other states use disclosure rules or different requirements for homes and centers. Check the linked state guide, your licensor and any contracts; a licensing rule does not resolve employee coverage or show that a quoted policy covers every childcare exposure.

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.