Does Your Homeowner's Insurance Still Cover You?

The surprising answer for many family child care providers is “probably not.”  Homeowners insurance is personal insurance and is not meant to cover risks associated with caring for children.

Homeowner’s insurance covers three basic things: 

  1. your house, 
  2. the contents of your home, 
  3. and some personal liability protection.

When you start using your home for your family child care business, you may lose some of this insurance protection you once had. This can come as a shock when you make a claim against your homeowner’s insurance policy and find out you aren’t covered!

What Happened to a Family Child Care Provider? 

In Minnesota a family child care provider’s roof suffered hail damage during a storm. When the contractors came out to fix the roof they noticed a “Day Care” sign in her window and notified the insurance company. The company refused to fix her roof, saying that her policy did not cover using her home as a family child care business.

In General Insurance Policies May Deny...

Some insurance policies deny coverage for all businesses. Other policies deny coverage in cases when a family child care provider cares for more than a specific number of children (usually four).


A typical homeowner’s insurance policy will cover several hundred thousands of dollars of your property (furniture, appliances, equipment, clothing, jewelry, etc.).

Many policies, however, have a limit of about $2,000 coverage for the contents of the home that are used for business purposes. If you think about it, most of the furniture, appliances and other items in your home are used in your business.

Another Family Child Care Provider Example:  Again in Minnesota, a tornado destroyed a provider’s home and everything in it. She received only $2,000 from her homeowner’s insurance policy for everything she owned.

What to do?

You should not assume that your homeowner’s insurance policy covers your house or its contents. Contact your homeowner’s insurance agent and tell him/her that you are a family child care provider caring for ____ (number of children) and that you use essentially everything in your home in your business. Ask these two questions:

  1. “Is my home covered if it’s damaged or destroyed?”
  2. “Are all of the contents of my home covered if they are damaged or destroyed?”

If your insurance agent says “yes” ask him/her to put it in writing. If you don’t have it in writing you probably aren’t covered. If the answer is “no” then you should find another insurance company that will insure you.

Types of Business Insurance

  • Business Property Insurance:  You can get business property insurance to cover all of the contents of your home that are not covered by a regular homeowner’s insurance policy. The cost is usually very reasonable (and 100% deductible).
  • Business Liability Insurance:  Your homeowner’s policy will not protect you if a child or parent is injured on your property. To protect yourself against injuries and lawsuits related to your business you need to purchase business liability insurance.

Finding Insurance

To find insurance companies that will cover your business, go to my family child care insurance directory at If you can’t find any company that will cover you from this list, contact your state insurance commissioner’s office for assistance. Or, you can contact me for further assistance at

Join The Child Care Business Partnership!

Minute Menu and Tom Copeland have teamed up to offer you the chance to reduce your taxes, receive direct assistance if you are audited, and personalized business advice so you can be more successful. For $15 a year you can join The Child Care Business Partnership and start receiving direct help from Tom Copeland in using Minute Menu Kids Pro. For more information:, or email Tom at


Tom Copeland

I've been the nation's leading trainer, author, and advocate on the business of family child care since 1981. I'm a licensed attorney and have presented hundreds of business workshops for family child care providers across the country. I answer thousands of calls and emails each year to help providers, tax professionals and trainers understand complex business and tax issues. Call me at 651-280-5991. Email me at Visit me on Facebook. From 1981 to 2009 I worked at Resources for Child Caring in Minnesota (now called Think Small), where I was director of Redleaf National Institute for 15 years. I've written nine books on the business of family child care published by Redleaf Press, a division of Resources for Child Caring. I was on the board of directors of First Children's Finance, a non-profit organization providing low interest loans and consulting and technical assistance to help family child care providers suceed as a business. They operate in Minnesota, Iowa, Michigan, North and South Dakota, Kansas, Missouri, and Texas. Here are some YouTube videos of me talking about my work with this organization and the business of family child care. I graduated from Macalester College (BA) in 1972 and from William Mitchell College of Law (JD) in 1980. I live in St. Paul, Minnesota with my wife Diane and two cats, Duke and Ella.