Daycare business insurance costs vary significantly across coverage types. MoneyGeek's analysis shows monthly premiums range from $13 for workers' compensation to $108 for professional liability coverage.
Updated: August 19, 2025
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Key Takeaways
Daycare business insurance costs range from $13 to $108 monthly, with general liability averaging $33 and professional liability reaching $108.
Your daycare insurance premiums depend on location, claims history, property types serviced and employee count.
Shop multiple insurers, bundle policies, increase deductibles and pay annually to find affordable daycare business insurance costs.
Average Daycare Business Insurance Cost Overall
| BOP | $49 |
| General Liability | $33 |
| Professional Liability (E&O) | $108 |
| Workers' Comp | $13 |
How did we determine these rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus on four coverage types: general liability, professional liability/E&O, workers' comp and business owner's policy. Survey results reflect limited sample data and may not represent all available rates in your area.
Daycare Business Insurance Cost for General Liability Coverage by State
Your daycare business insurance cost for general liability coverage depends on where you operate. Maine offers the most savings at $29 monthly (versus the $33 national average), while New York costs $38 monthly.
| Alabama | $32 |
| Alaska | $30 |
| Arizona | $31 |
| Arkansas | $32 |
| California | $37 |
| Colorado | $33 |
| Connecticut | $36 |
| Delaware | $35 |
| Florida | $36 |
| Georgia | $34 |
| Hawaii | $34 |
| Idaho | $31 |
| Illinois | $36 |
| Indiana | $32 |
| Iowa | $31 |
| Kansas | $32 |
| Kentucky | $31 |
| Louisiana | $37 |
| Maine | $29 |
| Maryland | $32 |
| Massachusetts | $35 |
| Michigan | $31 |
| Minnesota | $31 |
| Mississippi | $33 |
| Missouri | $33 |
| Montana | $33 |
| Nebraska | $31 |
| Nevada | $37 |
| New Hampshire | $33 |
| New Jersey | $37 |
| New Mexico | $33 |
| New York | $38 |
| North Carolina | $29 |
| North Dakota | $29 |
| Ohio | $31 |
| Oklahoma | $31 |
| Oregon | $31 |
| Pennsylvania | $38 |
| Rhode Island | $36 |
| South Carolina | $34 |
| South Dakota | $31 |
| Tennessee | $32 |
| Texas | $33 |
| Utah | $31 |
| Vermont | $32 |
| Virginia | $30 |
| Washington | $38 |
| West Virginia | $35 |
| Wisconsin | $32 |
| Wyoming | $31 |
How did we determine these rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus solely on general liability policies. Survey results reflect limited sample data and may not represent all available rates in your area.
Daycare Business Insurance Cost for Workers’ Compensation Coverage by State
Your daycare business's cost for workers' compensation varies by state. North Carolina offers the lowest rates at $11 monthly and New York the highest at $16 monthly. Our analysis reveals how state regulations and claim histories create these differences.
| Alabama | $13 |
| Alaska | $12 |
| Arizona | $13 |
| Arkansas | $13 |
| California | $15 |
| Colorado | $13 |
| Connecticut | $15 |
| Delaware | $14 |
| Florida | $15 |
| Georgia | $14 |
| Hawaii | $14 |
| Idaho | $13 |
| Illinois | $15 |
| Indiana | $13 |
| Iowa | $13 |
| Kansas | $13 |
| Kentucky | $12 |
| Louisiana | $15 |
| Maine | $12 |
| Maryland | $13 |
| Massachusetts | $14 |
| Michigan | $13 |
| Minnesota | $13 |
| Mississippi | $13 |
| Missouri | $13 |
| Montana | $13 |
| Nebraska | $13 |
| Nevada | $15 |
| New Hampshire | $13 |
| New Jersey | $15 |
| New Mexico | $13 |
| New York | $16 |
| North Carolina | $11 |
| Oklahoma | $13 |
| Oregon | $12 |
| Pennsylvania | $15 |
| Rhode Island | $15 |
| South Carolina | $14 |
| South Dakota | $12 |
| Tennessee | $13 |
| Texas | $13 |
| Utah | $13 |
| Vermont | $13 |
| Virginia | $12 |
| West Virginia | $14 |
| Wisconsin | $13 |
How did we determine these rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus solely on workers’ comp policies. Workers' compensation requirements vary by state and are mandated by state regulations. Survey results reflect limited sample data and may not represent all available rates in your area.
Daycare Business Insurance Cost for Professional Liability Coverage by State
Like other insurance types, your cost for professional liability varies based on location. Our research shows the national average is $108 monthly. North Dakota offers the lowest rates at $92 for E&O insurance, while Pennsylvania charges the highest at $125 monthly.
| Alabama | $107 |
| Alaska | $95 |
| Arizona | $102 |
| Arkansas | $104 |
| California | $120 |
| Colorado | $108 |
| Connecticut | $117 |
| Delaware | $116 |
| Florida | $117 |
| Georgia | $110 |
| Hawaii | $112 |
| Idaho | $101 |
| Illinois | $118 |
| Indiana | $106 |
| Iowa | $102 |
| Kansas | $106 |
| Kentucky | $101 |
| Louisiana | $120 |
| Maine | $94 |
| Maryland | $103 |
| Massachusetts | $115 |
| Michigan | $102 |
| Minnesota | $103 |
| Mississippi | $108 |
| Missouri | $107 |
| Montana | $108 |
| Nebraska | $103 |
| Nevada | $123 |
| New Hampshire | $105 |
| New Jersey | $122 |
| New Mexico | $110 |
| New York | $124 |
| North Carolina | $94 |
| North Dakota | $92 |
| Ohio | $100 |
| Oklahoma | $101 |
| Oregon | $100 |
| Pennsylvania | $125 |
| Rhode Island | $119 |
| South Carolina | $113 |
| South Dakota | $103 |
| Tennessee | $105 |
| Texas | $110 |
| Utah | $104 |
| Vermont | $105 |
| Virginia | $99 |
| Washington | $122 |
| West Virginia | $115 |
| Wisconsin | $106 |
| Wyoming | $99 |
How did we determine these rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus solely on professional liability policies. Survey results reflect limited sample data and may not represent all available rates in your area.
Daycare Business Insurance Cost for BOP Coverage by State
Business owner's policy rates show substantial variation in daycare business insurance costs nationwide. Monthly premiums range from $41 in Maine to $56 in Pennsylvania for comparable coverage.
| Alabama | $48 |
| Alaska | $44 |
| Arizona | $46 |
| Arkansas | $47 |
| California | $54 |
| Colorado | $49 |
| Connecticut | $52 |
| Delaware | $51 |
| Florida | $52 |
| Georgia | $49 |
| Hawaii | $51 |
| Idaho | $46 |
| Illinois | $53 |
| Indiana | $48 |
| Iowa | $45 |
| Kansas | $47 |
| Kentucky | $45 |
| Louisiana | $54 |
| Maine | $41 |
| Maryland | $46 |
| Massachusetts | $51 |
| Michigan | $45 |
| Minnesota | $45 |
| Mississippi | $49 |
| Missouri | $48 |
| Montana | $49 |
| Nebraska | $46 |
| Nevada | $56 |
| New Hampshire | $49 |
| New Jersey | $56 |
| New Mexico | $49 |
| New York | $56 |
| North Carolina | $43 |
| North Dakota | $42 |
| Ohio | $45 |
| Oklahoma | $45 |
| Oregon | $46 |
| Pennsylvania | $56 |
| Rhode Island | $53 |
| South Carolina | $50 |
| South Dakota | $45 |
| Tennessee | $47 |
| Texas | $50 |
| Utah | $46 |
| Vermont | $46 |
| Virginia | $45 |
| Washington | $56 |
| West Virginia | $50 |
| Wisconsin | $48 |
| Wyoming | $46 |
How did we determine these rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus solely on BOP coverage. Survey results reflect limited sample data and may not represent all available rates in your area.
Factors Affecting Daycare Business Insurance Cost
Daycare business insurance costs vary based on several factors that insurance companies review to set your rates. Understanding these factors helps you plan your budget better. Let's explore what affects your insurance costs.
Geographic location
Your business location affects workers' compensation rates due to local regulations and claim frequencies. Operating in areas prone to natural disasters or with higher crime rates increases your risk profile, and state differences create substantial premium variations.
Safety record and claims history
Previous claims impact future premiums, sometimes for three to five years. A single slip-and-fall lawsuit can substantially increase your general liability rates at renewal.
Facility type
Your daycare facility type affects insurance costs. Home-based daycares face different risks than commercial locations. Centers with outdoor playgrounds or swimming pools require additional coverage due to increased liability exposure.
Employee count and payroll
Insurers calculate workers' comp premiums based on your total payroll and job classifications. Adding employees increases your payroll costs, directly impacting your workers' compensation premiums since insurers calculate your rates per dollar of wages paid.
Services offered
Extended hours care, special needs services, and transportation services each carry unique risks. Centers offering basic childcare services face lower premiums than those providing specialized programs or additional services.
Business size and revenue
Higher annual revenue typically means higher premiums since insurers view larger operations as having greater exposure to claims. A small home daycare caring for six children will pay less than a commercial center with 50 children and $500,000 in annual revenue.
Coverage limits
Higher coverage limits provide better protection but cost more monthly. Choosing between different coverage amounts directly affects your premium, with higher limits increasing costs proportionally.
Equipment and vehicle values
The value of playground equipment, educational materials, and transportation vehicles affects your coverage needs. Centers with newer facilities and equipment require higher coverage limits, increasing insurance costs.
Credit score and financial stability
In most states, insurers can consider your business credit score when setting rates. A strong credit score can reduce premiums, while poor credit often increases costs substantially.
How to Get Cheap Daycare Business Insurance
Smart shopping and business practices can lower your daycare insurance costs significantly, and the proven strategies below will help reduce your premiums both now and as your safety record improves.
- 1
Choose the right coverage types for your business
Understanding what types of business insurance your daycare needs prevents overpaying for unnecessary coverage. Professional liability protects against claims of negligent care, while general liability covers injuries and property damage. Additional coverage like workers compensation is essential if you have employees.
- 2
Shop multiple insurance companies
Insurance rates can vary significantly between providers for the same coverage. Request quotes from at least three companies to find the best rates. Consider working with an independent agent who can compare quotes from multiple insurers for you.
- 3
Bundle your coverage types
Insurance companies offer substantial discounts when you bundle multiple policies together. Combining general liability, property insurance and professional liability with one carrier typically costs less than separate policies from different insurers.
- 4
Increase your deductibles
Choosing higher deductibles reduces your monthly premium costs. This means you'll pay more out-of-pocket for small claims, but your ongoing insurance expenses will be lower.
- 5
Pay annually instead of monthly
Monthly payment plans often include processing fees that increase your total costs. Paying your full premium annually eliminates these extra charges and may qualify you for additional discounts.
- 6
Review and adjust your coverage annually
Your insurance needs change as your daycare business grows. Review your coverage yearly to ensure you're not paying for unnecessary protection while maintaining adequate limits for your current operations.
Insurance for Daycare Business Cost: Bottom Line
Daycare business insurance costs range from $13 to $108 monthly, with your location, claims history and business size driving your actual premium. Getting quotes from multiple insurers, bundling your policies, choosing higher deductibles and paying annually instead of monthly helps you find more affordable rates.
Daycare Business Insurance Cost: FAQ
Our research team gathered the most common questions about daycare business insurance costs and provided clear answers below.
What is the cheapest type of daycare business insurance?
Workers' compensation insurance costs $13 monthly, but only covers workplace injuries. Most daycare businesses need general liability insurance to protect against customer accidents and property damage claims.
How much can I save by bundling my daycare business insurance policies?
Bundling multiple policies with one carrier can lead to significant discounts on overall coverage costs.
What factors make my daycare business insurance more expensive?
Location risk levels, claim history, number of children enrolled, staff size, building safety features and coverage limits selected can make insurance expensive.
Should I choose a $500 or $2,500 deductible for my daycare business insurance?
Higher deductibles lower your monthly premiums, but require more cash when filing claims. Consider your available funds and claim frequency when choosing between $500 and $2,500.
How much does workers' compensation cost for daycare businesses by state?
Workers' compensation rates for daycare businesses range from $11 monthly in North Carolina to $16 monthly in New York, with most states falling between $12 and $14 monthly.
Is business owner's policy (BOP) worth the extra cost for daycare companies?
A BOP costs $49 monthly and bundles general liability, commercial property and business interruption coverage into one policy. This comprehensive package delivers more value than purchasing individual policies.
How often should I shop around for daycare business insurance quotes?
You should review your daycare insurance coverage annually during renewal. Compare at least three carriers to find better rates, particularly if your business has grown or changed.
How We Determined Daycare Business Insurance Costs
We collected daycare business insurance quotes from companies across different states. For consistent comparisons, every quote used the same business setup:
- Two employees (three people total, including the owner)
- $150,000 annual payroll
- $300,000 annual revenue
- Already insured status
- $1 million per occurrence and $2 million total per year for all coverage except BOP, which includes the same limits plus $5,000 business property coverage
This profile represents small daycare businesses requiring comprehensive insurance coverage in most states. We chose companies offering broad national coverage and online quote capabilities, focusing on insurers that actively serve the daycare industry.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.