Last updated: September 14, 2026
South Dakota requires liability insurance for child care providers other than family day care, with proof available to DSS on request and no published dollar floor. Workers’ compensation remains optional for employers.
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South Dakota daycare liability: required except family day care
ARSD 67:42:17:43 (DSS Administrative Rules for Child Care Licensing, effective 7-3-23 compilation) states: except for family day care, all child care providers shall have liability insurance, and proof of current liability insurance shall be made available to the department upon request. No minimum dollar amount appears in the rule. DSS compliance plans cite this requirement and close findings when verification is produced.
Family day care is expressly excepted from that liability-insurance sentence. DSS materials describe registered family day care as a family home with not more than 12 children at one time, including the provider’s children under age 6 living in the home; registration is voluntary unless receiving public funds. Licensed centers and before-/after-school programs under the Office of Licensing & Accreditation fall under the insurance requirement. Give the insurer your category, operator name and capacity so evidence matches what DSS may request.
How much liability coverage should you buy?
Where the rules set no dollar floor, treat any quoted limit as a purchasing decision against your exposures and contracts—not as a statutory number. Send the provider any lease, school agreement or other contract requiring higher limits. Ask for comparable options at different limits, with the same covered activities and deductible, so you can see the cost difference.
Review the per-occurrence limit and any aggregate or separate abuse-related limit. Ask how defense costs affect available protection. If considering an umbrella, have the agent identify the underlying policies it requires and the childcare exposures it excludes; do not assume it fills every gap in the base policy.
Transport vehicle liability proof
ARSD 67:42:17:45(6) requires proof of liability insurance for any vehicle used for transporting children, available to the department on request. No dollar minimum is stated. Ask the agent whether personal auto, commercial auto or hired/non-owned coverage fits the vehicles and drivers you use, and keep proof ready if DSS asks.
Coverage to compare for a South Dakota daycare or preschool
| Operation or exposure | Coverage question to resolve |
|---|---|
| Children and visitors at your premises | Which liability coverage applies to injuries and property damage, and which activities are excluded? |
| Supervision, instruction and care | Is professional liability included or separate? How does the proposal treat abuse or molestation allegations? |
| Staff and volunteers | Who is insured, and what employee injury or employer-liability coverage is needed? |
| Furniture, supplies and play equipment | Who owns the property, what values are insured and which losses or locations are excluded? |
| School pickup and off-site activities | What vehicle and business coverage is needed for the drivers, trips and activities described? |
General liability, professional liability and abuse or molestation coverage answer different questions. Have the provider explain how the proposal handles a premises injury, a supervision allegation and a claim involving a staff member. Confirm that the services you offer are described and that the relevant people and locations are insured.
For a home, ask the residential insurer how business childcare affects its coverage and compare the proposed endorsement with a separate childcare policy. For a center or preschool, distinguish landlord-owned property from your furnishings, supplies and improvements. Ask which causes of loss and interruptions are covered before adding property or business-income protection.
How much does South Dakota daycare insurance cost?
There is no single premium for every daycare. As a broad reference, Insureon’s national human-and-social-services customer medians are $91/month for general liability, $135 for a business owner’s policy and $99 for professional liability, checked September 14, 2026. That sample is broader than daycare; these are not state daycare averages or Simply Business prices.
Use those figures only to understand separate budget categories. A business owner’s policy can bundle liability and property, so do not add every figure as though it were a required package. Request a childcare-specific proposal using your program type, child count and ages, payroll, transportation, claims history and required limits.
Compare the total annual premium, deductible, included activities and any separate abuse-coverage limit. Ask about installment charges, endorsements and the cost of changes during the year. Two prices are comparable only after the provider explains the differences in protection.
Request quotes using your actual license category and services. Comparing those details consistently is more useful than assigning every South Dakota program the same estimated premium.
Workers’ compensation is optional in South Dakota
The South Dakota Department of Labor and Regulation states there is no law requiring any employer to carry workers’ compensation insurance. Uninsured employers may be sued in civil court by an injured worker. Ask the agent how optional coverage interacts with exclusive-remedy and civil-suit risk for your staffing plan. Keep that decision separate from the facility liability mandate for non-family providers.
Keep coverage and licensing evidence aligned through the year
Calendar policy renewal alongside licensing paperwork. Resolve cancellation notices or a replacement policy before a lapse while children remain in care. Do not assume reduced enrollment, a school break or a change in insurer removes obligations that apply to your South Dakota license type.
Before adding transport, provide the insurer with vehicle ownership, driver and trip details. Ask about commercial auto or hired/non-owned exposures and coverage for the off-site activity itself. Update the agent before a capacity increase, move or additional location so the policy and evidence match what DSS expects to see.
Prepare your South Dakota daycare insurance quote
- Legal operator name, address, permit or certificate type and requested coverage date.
- Licensed capacity, actual enrollment, ages served, hours and all locations.
- Staff, volunteers, payroll and screening/supervision procedures.
- Transportation, field trips, water activities and other services offered.
- Existing policy, claim history and insurance requirements from leases or contracts.
Ask each provider to identify the named insured, covered activities, limits, deductibles, exclusions and endorsements. Confirm whether defense costs reduce any relevant limit and how claims must be reported. If a quote cannot cover an activity, resolve that gap rather than assuming a certificate will make the proposal acceptable.
Get a daycare insurance quote
Start your daycare insurance quote with Simply Business. Answer a few questions about your business and let their team help you find coverage.
Affiliate link — we may earn a commission at no additional cost to you.
Data for South Dakota
Free research and planning tools for starting a daycare in South Dakota. Most of the data pages compare every state, so look for South Dakota in the table or map.
- Workplace injury rates by industry: how often workers get hurt in cleaning, landscaping, HVAC, daycare and other services.
- Independent contractor rules by state: the test South Dakota uses to decide if a helper is a contractor or an employee.
- Health insurance for the self-employed: 2027 ACA premium requests in South Dakota and where the subsidy cutoff sits.
- Insurance requirements for contracts: what limits, certificates and endorsements commercial and public buyers ask for.
- Daycare break-even calculator: how many enrolled children you need to cover costs and pay yourself.
Frequently asked questions
Does South Dakota require daycare liability insurance?
Yes for providers other than family day care. ARSD 67:42:17:43 states that except for family day care, all child care providers shall have liability insurance, with proof of current coverage available to the department on request. No minimum dollar amount is stated.
Are family day care homes exempt from the South Dakota liability rule?
Yes. The same ARSD 67:42:17:43 sentence expressly excepts family day care. Registration is voluntary unless the home receives public funds; confirm your category with DSS before treating the exception as applicable.
What insurance is required when a South Dakota provider transports children?
ARSD 67:42:17:45(6) requires proof of liability insurance for any vehicle used for transporting children, available to the department on request. The rule does not state a dollar minimum.
Is workers’ compensation required for South Dakota daycares?
No. The South Dakota Department of Labor and Regulation states there is no law requiring any employer to carry workers’ compensation insurance. Uninsured employers may still face civil suits from injured workers.
Related guides
Daycare Insurance · South Dakota / Daycare
Requirements and source benchmarks checked September 14, 2026. Policy terms and availability depend on the insurer and your business.
