Starting a childcare center in Texas is an exciting opportunity to serve families and support early learning. What a rewarding task to enjoy each day. But it also means meeting specific requirements to operate legally and safely in Texas. While licensing requirements cover many areas, one thing child care center owners do not want to think about is their liability insurance coverage. And that’s a big mistake.
If you’re opening a daycare center that does not operate out of your home, understanding the minimum requirements for insurance is one of the most important steps in protecting your staff, the children in your care, and your business.
What does your childcare center in Texas need to know about becoming licensed? And why does insurance play a central role?
In Texas, if you’re operating a childcare center outside of your home and caring for seven our more children under 14 years of age, you must apply for a Licensed Child Care Center permit through Texas Health and Human Services. This child care licensing requirement is not negotiable under those conditions. Home based daycares fall under different rules that we won't look at here.
As a result of these basic requirements, this license is required for most preschools, after-school programs, and early childhood education facilities. It is also assumed that your child care operation will be at least two hours per day, three days per week, and you don't offer overnight care. These are very common childcare and daycare operations found all over our state. After you have determined that you need a license, you have to understand what type of insurance you need to meet the licensing requirements.
It should not come as a surprise, but to receive and maintain a license for a childcare center in Texas your child care program is required to have liability insurance coverage. While there are limited exceptions to this mandate, all daycare centers are required to have at least $300,000 in liability insurance coverage as part of the licensing process.
But the words "liability insurance coverage" are vague in insurance terms. This is because insurance companies offer different types of insurance to cover the different types of liability risk exposures that child care providers have. That is why it is important to understand what is required in the licensing process and what is greatly recommended.
General Liablity is the foundation of your liability coverage. It protects your center if a child, parent, or visitor is injured while on the property. If a parent slips on a wet floor or a child gets hurt during playtime, this policy helps cover medical costs and legal expenses. This type of liability coverage will meet the minimum standard for the licensing process.
This additional coverage protects against liability claims related to the care your center provides. If a parent says your staff acted improperly, failed to supervise a child, or made a poor decision, professional liability steps in to protect your child-care center from claims. It covers defense costs and potential settlements, even if the claim isn’t true.
Abuse & Molestation liability coverage is one of the most important protections for childcare centers today. Whether a child abuse claim is valid or not, legal defense against abuse or misconduct allegations is costly. Most insurance policies for childcare providers won’t help unless this coverage is specifically included. It’s not automatically part of general liability. Make sure your policy includes it and that the limits are high enough to protect your business.
Remember, Texas licensing requires you to provide proof of liability insurance annually when you renew your permit. Without it, you’re not only exposed to legal and financial risk. While you don't want to risk losing your license, it is also important to make sure you are properly protected.
Now that you understand more about the insurance requirements to obtain a license, the question is always what do I do next? Here’s what the application process typically looks like to become a licensed childcare provider location.
Getting your Texas childcare center license is a big step, but it’s just the beginning of managing a well-protected business. Keeping your insurance current and reviewing your coverage each year is essential to staying in compliance and protecting your operation.
Your license will need to be renewed every two years, and you’ll be expected to submit updated insurance documentation with each renewal. While some don't like paperwork, keeping it current is a great sign to prospective parents who have a demand for quality childcare.
Because Texas childcare licensing requires specific types of insurance, it’s smart to work with someone who understands those rules. But more importantly, it is important to work with an insurance agent who understands the needs of Texas daycares who can help you go beyond just the bare minimum. That’s where True Texas Education Insurance from Insurance For Texans comes in.
Our agents help childcare centers across Texas secure the right coverage, explain what policies actually protect your business, and stay compliant with licensing rules. We do this so that you can focus on the kids, not the paperwork.
Click the button below to connect with a specialist who can help you get the right insurance coverage to launch or renew your licensed childcare center.