Idaho Daycare Insurance Requirements — Coverage Types and Costs

Your Homeowners Policy Does Not Cover Your Daycare

This is the single most dangerous assumption home daycare operators make. Standard homeowners and renters insurance policies contain explicit commercial activity exclusions. If a child is injured during daycare hours and you file a claim against your homeowners policy, the insurer will likely deny it because you were conducting a commercial business in your residence.

Idaho requires proof of active commercial liability and fire insurance as part of the state licensing application. You cannot submit your final licensing packet through RISE without an insurance certificate on file.

Commercial General Liability (CGL)

This is the foundational policy for any home daycare. CGL insurance covers:

• Bodily injury — medical expenses and legal defense if a child is injured on your property
• Property damage — if a child damages a parent's property while in your care
• Legal defense costs — attorney fees if a parent sues, regardless of whether the claim has merit

Premiums vary based on your capacity, location, claims history, coverage, and property features. Obtain quotes for your specific operation rather than relying on a statewide price range.

Abuse and Molestation Coverage

This is a separate endorsement or standalone policy that covers allegations of physical, emotional, or sexual abuse or neglect. It is not automatically included in standard CGL policies and must be specifically added.

Ask the broker whether this coverage is available and whether any referral network or ICCP arrangement you use has its own insurance requirements.

Workers' Compensation

The research identifies workers' compensation as mandatory under Idaho law if you hire even one part-time assistant or employee. Confirm the coverage requirement before the employee's first day.

If you are a sole operator with no employees, workers' comp is not required. But the moment you bring on an assistant to handle higher enrollment — which the points system may require as your group mix shifts — you must have coverage in place before their first day.

Commercial Auto Insurance

Standard personal auto insurance excludes commercial use. If you transport children in your personal vehicle for field trips, school pickups, or any other daycare-related travel, you need a commercial auto endorsement or a separate commercial auto policy.

Not every home daycare provides transportation, but if you do, this coverage is non-negotiable. A car accident with enrolled children in the vehicle and no commercial coverage is a worst-case liability scenario.

Finding the Right Broker

A commercial insurance broker who specializes in childcare operations can bundle these coverages and identify discounts. Ask specifically for:

• Experience insuring home-based daycares (not just commercial centers)
• Policies that cover home daycares with mixed-age groups under Idaho's point system
• Whether the policy requires an annual inspection and what the renewal process looks like

Get quotes from at least two brokers. Premiums for identical coverage can vary by 40% or more between carriers.

The Idaho Home Daycare License guide walks through exactly when in the licensing timeline to secure insurance and what documentation to upload to your RISE profile.

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