What type of insurance does a home-based day care business require?

By Insurance.com Posted : 01/01/2011

Going without the proper amount of insurance when you run a home-based day care business leaves you wide open for financial disaster. A day care business involves all sorts of liability issues: What if a child is injured while under your care? What if you're accused of abuse? What if the house burns down and all your day care equipment is destroyed?

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A standard home insurance policy does not protect you from business liability and typically provides only $2,500 coverage for business equipment, according to the Insurance Information Institute. Some home-based business owners can get the additional coverage they need by purchasing an endorsement to a home insurance policy. But a liability endorsement is usually available only to businesses that have few visitors, which wouldn't be the case with a day care.

What does the insurance cover?

You need to purchase a standalone in-home business policy or business-owners policy. Specialty insurers and some home insurance companies sell in-home business insurance. The policies generally:

  • Cover business property.
  • Pay for income loss in case your home is damaged or destroyed and cannot be used for a period of time.
  • Cover additional expenses for operating out of a temporary location.
  • Provide liability protection.

The next step up in insurance is a business owners policy, which provides the most comprehensive coverage for a home-based business.

Shop around among companies and insurance brokers who specialize in insurance for home-based businesses. Find a skilled agent who has experience serving clients who run day care businesses and is willing to take the time to understand your unique needs. Once you purchase a policy, keep in touch with the agent and update your policy to keep up with your needs as the business changes.


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5 Responses to "What type of insurance does a home-based day care business require?"
  1. Irma Hickox 21, Dec, 2012

    I'm thinking on opening a In-home child care, I dont own my townhouse, but I have the ok from the owners. I need liability of 1,000,000 minimum. I'm located in WA state. Thanks

  2. Jacqulyn Townsel 16, Oct, 2012

    I am looking for liabilty insurance for my licensed home daycare. I have been in the childcare business since 2002 but only in the private sector. In order for me to accept E.L.C. clients I am required to have liability insurance($250,000/$500,000 policy). Please e-mail me at eltown@hotmail.com with a contact number so I can speak with someone about your coverages. Thank you.

  3. Yolanda Ejemba 24, Apr, 2012

    Hi im looking for a quote for home daycare insurance. I am not a owner of my home but have permission from my landlord to open. Looking for the cheapest one. Thank you

  4. Pamela Forbus 24, Feb, 2012

    I am in the process of starting a home daycare, and need insurance to get everything going.Looking for $1,000,000 coverage.

  5. Julie Stethem 07, Feb, 2012

    Do you cover daycare liability for Montana?


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