Average Daycare Center Insurance Cost (2026 Report)

A business owners policy (BOP) packages general liability, commercial property and business income insurance into one policy. For a daycare center, that covers injuries or property damage involving families and visitors, damage to items such as furniture, toys and classroom equipment, and some lost income if covered property damage temporarily closes your center. 

On average, a BOP costs $243 per month or $2,916 per year, about 10% less than buying the coverages separately. Costs also vary by state, with the highest and lowest estimates are separated by $175. Average monthly costs range from $110 in West Virginia to $285 in California, about 159% higher.

General liability covers claims that someone outside your business was injured or had their property damaged because of your daycare’s operations. That could mean a child or parent getting hurt at your center, or your staff damaging a parent’s phone or stroller. In some states, you’re required to carry general liability to qualify for or renew a daycare license, and a landlord could also ask for it before leasing you a space.

General liability costs an average of $154 per month or $1,847 per year, and varies between states. Daycares in West Virginia spend an average of $281 for general liability insurance. That's 67% lower than what you'd pay if you were operating out of California, where premiums are around $94 per month.

Commercial property insurance pays to repair or replace daycare property, like furniture, learning materials, computers, kitchen equipment and toys, damaged by a covered event. For a policy with a $100,000-limit for personal business property, commercial property  costs an average of $31 per month or $371 per year. Depending on where you operate, how much you spend varies. For example, you'll pay around $27 per month if your center is in Alaska, North Dakota and South Dakota, while those based in Hawaii or New York spend a monthly average of $37.

Because serious property damage can also force your center to close, commercial property is often paired with business income insurance, which helps replace lost revenue and cover ongoing expenses during the shutdown. Commercial property is often bundled with general liability in a business owners policy (BOP).

Professional liability helps when someone claims a mistake you made while providing those services caused harm, such as staff failing to follow a care plan or supervise an activity properly. You may also need it if a funding agreement, referral contract or partnership requires PL coverage for mistakes tied to your care services.

The average cost for professional liability averages $184 per month or $2,211 per year, with estimates varying per state. In Maine, North Carolina and North Dakota, you'll spend around $160 per month on average. In Washington D.C., coverage costs 1.4 times more at $217 per month.

Once you hire employees, most states require workers’ compensation insurance, but the threshold varies. California, for example, requires it with your first employee, while in Florida, it's only legally mandated once you have four or more. Daycare employees can hurt their backs lifting children, slip while cleaning or get injured during playground activities. Workers’ comp helps pay their medical bills and replaces part of their lost wages while they recover. 

Expect workers' comp costs to average around $30 per employee per month or $355 per employee per year. Pennsylvania, with a monthly average premium of $74 per employee, costs 4.1 times higher than if you were in Arkansas, Indiana, Iowa or South Dakota. For those four lost-cost states, daycare centers spend around $18 per month per employee.

A cyber insurance policy costs an average of $110 per month or $1,321 per year, but where you operate affects your estimate. You'll pay 46% more for cyber liability insurance if you're in Washington at $136 per month, than if you were in Alaska or North Dakota, where the average monthly premium is $93.

Adding cyber liability to your policy mix protects your daycare against risks such as stolen enrollment records, exposed medical information, hacked payment accounts or ransomware that locks you out of parent-management software. While no state law requires you to carry cyber coverage, it becomes more important as you store more information online and rely on digital systems to run your center.

If your daycare owns a vehicle used to transport children, expect to add an average of $209 per month to your insurance budget in New Jersey. The same coverage averages $821 per month in Michigan, or about 3.9 times as much. Nationally, however, commercial auto insurance costs average $185 per month or $2,215 per year.  

You need commercial auto when your daycare owns a van, bus or other vehicle used to transport children or pick up supplies. Daycare licensing requirements may add separate rules when children are transported. Washington requires licensed care providers to verify that each driver has a valid license and is insured under an auto liability policy. Illinois goes further, requiring at least $1 million in liability coverage per crash for daycare vehicles that require a school bus driver permit.

Beyond the more common coverage types, daycare centers need more specialized policies to make sure they have enough financial protection to address their needs. I've put up a table that breaks this down so you know when you'll need to get them. The estimates for these were from external research and are outside our datasets.