Average Daycare Center Insurance Cost (2026 Report)

The right insurance bundle depends on how you care for children, where you operate and whether you have employees, digital records or business vehicles. Match your daycare to the profile closest to it below, then use the monthly rate as a budgeting estimate.

• Starting Bundle (You recently opened or run a small center): Your focus is on keeping daily care running safely while protecting the center, your employees and the services you provide. This bundle fits a small operation with one location, a limited team and straightforward day-to-day responsibilities. You'll spend an average of $487 per month.
• Recommended Bundle (You want broader protection for child-related incidents): As enrollment becomes more consistent, your center handles more daily interactions among children, employees and families. This bundle is a good fit if you want added protection for serious incidents that affect a child's care and a parent's trust. It includes abuse and molestation liability and accident medical insurance. You'll spend an average of $1,042 per month.
• Growing Bundle (Your records and staff responsibilities have expanded): More employees, enrollment records and payment activity create additional responsibilities behind the scenes. This bundle fits centers with a more structured team and heavier reliance on digital systems to manage families, staff and daily operations. You'll spend an average of $1,156 per month.
• Comprehensive Bundle (Transportation and higher claim limits matter to your center): This bundle fits a center with greater liability exposure and more at stake if a serious accident or lawsuit occurs. Your operation is more likely to have additional moving parts, such as transporting children, managing multiple classrooms or serving a larger enrollment. You'll spend an average of $1,404 per month.

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.

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. General liability costs an average of $154 per month or $1,847 per year. 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.

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. Because serious property damage can also force your center to close, this coverage 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).

Parents trust your daycare to make sound decisions about supervision, care and safety. 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. The average cost for professional liability averages $184 per month or $2,211 per year. You may also need it if a funding agreement, referral contract or partnership requires PL coverage for mistakes tied to your care services.

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.

A cyber insurance policy costs an average of $110 per month or $1,321 per year. Adding it 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. If a breech does happen, cyber liability helps pay to investigate what happened, notify affected families and restore lost or damaged records. 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.

You need commercial auto when your daycare owns a van, bus or other vehicle used to transport children, pick up supplies or run business errands. For example, if your van rear-ends another car during school pickup, liability coverage can help pay for injuries and damage to the other vehicle, while collision coverage can pay to repair your van if you added it. On average, commercial auto insurance costs an average of $185 per month or $2,215 per year. 

Commercial auto requirements vary by state and, at minimum, your coverage should meet your state’s auto insurance rules. 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.

BOP costs vary by state because general liability and commercial property rates change with local claim costs, property risks and repair expenses. Average rates for states 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.

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. Medical care and property repairs are typically higher in California, which has a large urban market. That drives general liability costs higher than West Virginia, which is less densely populated and might have fever high-cost third party claims.

The cost difference between the states with the highest and lowest average rates is only $10 per month. 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. This suggests your location has a smaller effect on commercial property premiums. Instead, your property value, coverage limits and building-specific risks usually create more variation.

On average, professional liability costs $160 per month in Maine, North Carolina and North Dakota. In Washington D.C., you'll spend 1.4 times more on premiums, averaging around $217 per month. D.C. daycare centers have to follow detailed rules for supervision, discipline, staff qualifications and child-to-staff ratios. They must also report unusual incidents involving children in their care. With more rules and reporting duties to follow, there are more ways a parent or regulator could question whether the center handled a situation properly.

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 2026 WCRI study found that Pennsylvania had higher total workers’ compensation costs per claim than the other 17 states it reviewed and the amount paid to employees who missed work played a major role. Arkansas has seen the opposite trend, with its number of lost-time claims dropping since 2005. That helped support several rate cuts, including a 10.8% reduction in voluntary-market loss costs and an 11% cut in assigned-risk rates in 2022.

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. The district’s data breach rules cover many records you may keep, including medical, insurance and payment information. After a breach, you need to noticy both affected families and the attorney general, and if Social Security or tax ID numbers were exposed, you must also provide 18 months of identity theft protection. Those requirements can make a cyber incident more expensive to handle.

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. Michigan’s no-fault system makes commercial auto claims more expensive because policies include personal injury protection and property protection coverage. Commercial policies also don't receive the same required premium reductions available to some personal auto policies. For a daycare van carrying children, that can increase the insurer’s possible payout after a serious crash.

Higher limits give you more financial protection, but they also raise the amount an insurer could pay after a claim. That usually leads to a higher premium. Lower limits cost less, though they may leave you paying more out of pocket if a large claim exceeds your policy limit.

Where you operate affects the cost of claims. Insurers may charge more in areas with higher medical bills, repair costs, lawsuit activity, crime or severe weather. Even businesses in the same state can pay different rates if their local risks differ.

Past claims tell insurers how likely you are to file another one. Several recent claims or one expensive loss can raise your premium. A clean claims record may support lower rates, especially when you have gone several years without a loss.

Larger businesses usually have more customers, employees, property and daily activity, which creates more chances for a claim. Insurers may use revenue, payroll or another measure of business activity to estimate this risk, so premiums often go up as the business grows.

Your deductible is the amount you pay before your insurance starts covering a claim. Choosing a higher deductible can lower your premium because you take on more of the initial cost. A lower deductible usually raises the premium but reduces what you must pay after a covered loss.