Cost of Liability Insurance for a Childcare Center

All businesses need insurance.
All businesses need insurance.

The cost of liability insurance for a childcare center varies according to several factors. One thing is for sure; this is not a business expense that a childcare center owner should scrimp on.

Liability Insurance Necessity

Childcare center owners do not have much choice when it comes to whether or not they would like to purchase liability insurance. Most states have laws pertaining to the minimum amount of liability insurance this type of business must maintain.

Once the childcare center owner has obtained the minimum amount of liability insurance required by the state, it is then up to the owner to determine how much additional coverage to purchase, if any. If you have questions regarding the minimum liability insurance requirements for the state in which your state is located, contact your state's insurance commissioner.

Coverage Available

The cost of liability insurance for a childcare center depends largely on the total amount of coverage needed. It is important to note that childcare centers which are run out of the owner's house are generally not covered by the owner's regular homeowners insurance policy. Separate coverage is almost always necessary.

There is more than one type of liability coverage for childcare centers. A general liability policy will cover the childcare center in the event of an injury occurring on the premises. This type of coverage usually covers property damage as well. Other liability policies that may be needed by childcare centers include:

  • Vehicle-Related Liability Insurance: Any childcare center that provides transportation to staff or children should purchase a liability policy that is specific to vehicle-related accidents and injuries. There may be minimum state requirements for this type of liability insurance.
  • Legal Liability: Purchase a specific liability insurance policy if you would like to protect yourself from the costs associated with being sued. This could cover all types of legal actions including being sued for libel or slander.
  • Food or Merchandise Liability: Childcare centers that serve food to children may need additional insurance coverage in case any of the meals served wind up causing illness. This type of policy may also cover any items used or sold by the childcare center that may cause injury, such as toys or other merchandise.

There are other liability policies available. It is a good idea to speak with an insurance representative who is well-versed in the state requirements for childcare center liability insurance as well as the specific liability coverage needs for individual centers. A knowledgeable insurance representative may know about policies that are a good idea, yet you had not considered as the childcare center owner.

What is the Cost of Liability Insurance for a Childcare Center

The cost of liability insurance depends on the amount of coverage needed. For example, a small childcare center that cares for 15 children on a part-time basis will probably not need as much liability insurance as a larger center that cares for over 60 children full time. Other factors that may increase the need for more coverage include:

  • If the childcare center offers meals or snacks
  • If the childcare center provides transportation
  • The location of the childcare center

The owner of the childcare center must also take into account the amount of deductible with which he or she will be comfortable. How much money does the owner want to be liable for before the insurance company starts paying on the claim? In general, the higher the amount of the deductible, the lower the cost of the monthly premium.


Obtain quotes for liability insurance from more than one insurance company. A little comparison shopping can save you quite a bit of money. Not all insurance companies offer the exact same coverage; so, you may be able to obtain the coverage you need from one particular insurance company over another.

Here is a brief list of some of the insurance companies offering liability insurance to childcare centers to get you started in your search:

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Cost of Liability Insurance for a Childcare Center