Updated October 2026

Operating a home daycare can be a rewarding way to earn an income while providing an important service to families in your community.

However, caring for other people's children in your home also creates responsibilities and potential liabilities that are different from those associated with ordinary residential use.

One of the most common questions we hear is whether a standard homeowners insurance policy will cover a home daycare.

The answer is that you should never assume your existing home insurance automatically provides coverage for a daycare business.

Before accepting children into your care, it is important to discuss your plans with your insurance broker and make sure appropriate insurance arrangements are in place.

Here are answers to some common questions about home daycare insurance in Ontario.

1. Does My Home Insurance Cover a Home Daycare?

Not necessarily.

Standard homeowners insurance is primarily intended to cover a residence used for personal purposes.

Operating a daycare introduces business activities that may fall outside the coverage provided by a typical home insurance policy.

For example, a homeowners policy may contain exclusions or restrictions relating to business activities and liability arising from those activities.

Some insurers may permit certain home daycare operations through an endorsement or specialized insurance arrangement.

Others may decline to insure a property where a daycare is operated.

The availability of coverage depends on the insurer, the number and ages of children, the daycare's activities and other underwriting considerations.

Before operating a home daycare, notify your insurance broker and obtain confirmation that the insurer accepts the daycare operation and that appropriate coverage is in place.

2. What Is the Difference Between Licensed and Unlicensed Home Daycare in Ontario?

Ontario's Child Care and Early Years Act, 2014 establishes rules for child care providers.

There are two common arrangements for home child care.

Home Child Care Overseen by a Licensed Agency

An individual home child care provider may operate under the oversight of a licensed home child care agency.

The agency is licensed by Ontario's Ministry of Education; the individual home provider is not separately licensed by the ministry.

Under the general rules, a provider overseen by a licensed agency may care for a maximum of six children under the age of 13, including the provider's own children under four.

No more than three children may be under the age of two.

Unlicensed Home Child Care

An unlicensed home child care provider may generally care for a maximum of five children under the age of 13, including the provider's own children under four.

No more than three children may be under the age of two.

Unlicensed providers must also meet applicable legal requirements, including informing parents in writing that the program is not licensed by the Government of Ontario.

These are general rules. Providers should review the current provincial requirements and any applicable exceptions before beginning operations.

An unlicensed daycare is not necessarily operating illegally. Ontario permits unlicensed home child care within established rules.

However, being legally permitted to operate does not mean the daycare is automatically covered by a homeowners insurance policy.

3. Does the Number of Children Affect My Insurance?

Yes, it can.

Insurance companies may consider the number of children attending the daycare when determining whether they will provide coverage.

They may also consider:

• The ages of the children.

• Whether infants or toddlers are cared for.

• The hours of operation.

• Whether care is provided overnight.

• Whether the provider has employees or assistants.

• The areas of the home used for daycare.

• Outdoor play equipment and activities.

• Whether children are transported in a vehicle.

Some insurers may only consider home daycares that meet particular eligibility requirements.

Others may require specialized commercial insurance.

An insurer's maximum number of permitted daycare children may be lower than the maximum allowed under Ontario law.

Legal permission to care for a certain number of children does not guarantee insurance eligibility for that number.

If the number of children changes, contact your broker before accepting additional children.

4. Why Is Liability Insurance So Important for Home Daycares?

Caring for children creates potential liability exposures.

Children may be injured while playing, eating, participating in activities or moving around the home.

For example:

• A child falls from playground equipment.

• A child slips on a wet floor.

• A child is injured while participating in a supervised activity.

• A child suffers an injury involving furniture or equipment.

• A parent alleges that inadequate supervision contributed to an injury.

An injury does not automatically mean the daycare operator is legally responsible.

However, an allegation of negligence could result in a claim or lawsuit.

Appropriate liability insurance may help provide a legal defence and respond to covered damages if the daycare operator is found legally liable.

The coverage depends on the policy wording, limits, exclusions and circumstances of the claim.

Because claims involving serious injuries can be financially significant, liability protection should be a central part of any home daycare insurance review.

5. Isn't My Personal Liability Coverage Enough?

You should not rely on personal liability coverage without confirming how the policy treats daycare operations.

The personal liability section of a homeowners policy generally addresses certain liabilities arising from personal activities.

Business-related liabilities may be excluded or restricted.

For example, if a child attending a paid daycare is injured and a claim is made against the operator, the insurer may need to determine whether the claim arises from an excluded business activity.

A daycare endorsement or specialized policy may be required.

Even where an insurer agrees to provide daycare liability coverage, the endorsement may contain specific restrictions.

Ask your broker to explain what is covered and what is not.

6. Does a Licensed Home Child Care Agency Provide Insurance?

Licensed home child care agencies have insurance obligations under Ontario's child care regulations.

These include requirements for liability and personal injury coverage, with coverage extending to home child care providers overseen by the agency where applicable.

However, an individual provider should not assume that the agency's policy addresses every exposure.

Important questions include:

• Am I insured under the agency's policy?

• What activities are covered?

• What are the liability limits?

• Does the coverage apply only while I am providing care through the agency?

• Are there exclusions or deductibles I should understand?

• Does the agency's insurance cover damage to my home?

• Does it cover my personal belongings or daycare equipment?

• What happens if I provide care outside the agency arrangement?

The provider's homeowners insurer should also be informed of the daycare operation, even if liability coverage is available through an agency.

Agency insurance and homeowners insurance serve different purposes.

7. Do Unlicensed Home Daycare Providers Need Liability Insurance?

An unlicensed home daycare provider should arrange appropriate liability protection before beginning operations.

While the insurance obligations imposed on licensed agencies should not be confused with a universal statutory requirement for every unlicensed provider to carry a particular commercial policy, the financial exposure can still be substantial.

A serious injury or property damage claim could result in significant legal expenses and potential damages.

Some homeowners insurers may offer limited daycare liability endorsements for eligible operations.

Other situations may require a separate commercial liability policy or a specialized daycare insurance product.

The appropriate arrangement depends on the operation.

Do not assume that operating below the provincial child care limit removes the need to address insurance.

8. What About Toys, Furniture and Daycare Equipment?

A home daycare may require equipment such as:

• Cribs and cots.

• Highchairs.

• Tables and chairs.

• Toys and educational materials.

• Outdoor play structures.

• Strollers.

• Safety gates.

• Storage units and other furnishings.

These items may be considered business property rather than ordinary household contents.

Homeowners insurance policies often limit or exclude coverage for certain business property.

Depending on the insurer, additional coverage may be available.

If you operate a daycare, prepare an inventory of your business equipment and discuss its value with your broker.

This is especially important if you have invested substantially in furnishing or modifying areas of your home for child care.

9. What if a Child Damages My Home?

Children sometimes accidentally damage furniture, walls, flooring or other property.

However, not every accidental incident is an insured loss.

Home insurance generally does not provide unrestricted coverage for accidental damage, and business-related activities may introduce additional exclusions.

For example, routine wear and tear, gradual deterioration and many types of accidental breakage may not be covered.

If daycare activities cause damage to your property, the outcome will depend on the cause of loss and the policy wording.

Ask your broker how the insurer treats property damage associated with the daycare operation.

10. What if I Hire an Assistant or Employee?

Hiring someone to help care for children introduces additional considerations.

Your insurer may need information about:

• The person's duties.

• Hours worked.

• Whether they supervise children independently.

• Their qualifications and experience.

• Whether they are an employee or an independent contractor.

• Whether the arrangement complies with applicable child care rules.

Insurance for employees and assistants should not be assumed under a standard homeowners policy.

You may also have employment-related obligations, including questions concerning workplace injury insurance, payroll and other legal requirements.

These matters should be reviewed with appropriate professionals.

It is also important to remember that adding an assistant does not automatically increase the number of children an unlicensed daycare is permitted to care for under Ontario's general rules.

11. Can I Transport Daycare Children in My Personal Vehicle?

Transporting children as part of a daycare operation is an important insurance issue.

A personal automobile insurance policy may not be rated or underwritten for regular transportation associated with a business.

For example, using your vehicle to transport daycare children to school, a park or an organized activity may require the insurer to review the vehicle's use.

Before transporting children in connection with your daycare, notify your automobile insurance broker.

Provide details about:

• How often children will be transported.

• The purpose of the trips.

• The number and ages of passengers.

• Who will drive.

• Whether transportation is included in the daycare fee.

You should also ensure that all applicable child passenger safety and transportation requirements are followed.

Do not assume that your personal automobile insurance automatically covers every daycare-related use of your vehicle.

12. What About Outdoor Play Equipment and Swimming Pools?

Outdoor activities are common in home daycare settings.

However, certain features can create additional liability concerns.

Examples include:

• Trampolines.

• Swimming pools.

• Hot tubs.

• Climbing structures.

• Slides and swings.

• Large play structures.

• Other recreational equipment.

Insurance companies may impose restrictions or decline certain risks depending on the equipment and how it is used.

Some activities may also be prohibited under applicable child care requirements or agency rules.

If your home has a pool, trampoline or other recreational feature, disclose it to your broker and confirm whether daycare children are permitted to use it.

Never assume that an activity is insured simply because the equipment is located on your own property.

13. What if I Only Babysit Occasionally?

Occasional babysitting and operating a regular home daycare are not necessarily treated the same way by insurers.

For example, occasionally watching a relative's child without operating a business may present different considerations from providing regular paid care to several unrelated children.

However, there is no universal insurance rule that automatically permits a certain number of children, hours or amount of income.

The insurer may consider the frequency of care, compensation, relationship to the children and other circumstances.

If you regularly provide child care in your home, even on a part-time basis, tell your broker.

It is better to clarify the coverage before an incident occurs.

14. What if I Rent My Home?

If you rent your home and want to operate a daycare, there are additional considerations.

Your tenant insurance policy may not cover daycare-related business activities or liability.

You may also need to review your lease and obtain any required permission from the landlord.

A landlord's property insurance should not be assumed to cover your daycare operations, personal belongings or business liability.

Before opening a daycare in rented accommodation, discuss the arrangement with your landlord and insurance broker.

15. Can Operating a Daycare Affect My Existing Home Insurance?

Yes.

An insurance company may consider a home daycare a material change in the use or risk of the property.

Depending on the insurer, it may:

• Agree to insure the daycare subject to conditions.

• Require a specific endorsement.

• Charge an additional premium.

• Restrict certain coverages.

• Require separate business insurance.

• Decline to continue providing coverage for the property.

The insurer's decision may depend on the nature and size of the operation.

Failing to disclose a daycare could create serious coverage complications if a claim occurs.

For example, following a fire or liability claim, the insurer may review how the home was being used and whether the daycare operation had been disclosed.

The consequences will depend on the policy, the facts and applicable insurance law.

The safest approach is to obtain the insurer's acceptance before the daycare begins operating.

16. Are There Other Requirements Besides Insurance?

Yes.

Insurance is only one part of operating a home daycare.

Depending on the circumstances, providers may need to consider:

• Ontario's child care legislation and regulations.

• Municipal zoning and property-use rules.

• Fire safety requirements.

• Building and property standards.

• Health and safety practices.

• Background checks and screening requirements.

• Applicable agency rules.

• Business registration and tax obligations.

• Employment requirements where staff are involved.

Requirements vary depending on the type of daycare and the municipality.

A home daycare operator should confirm the applicable rules with the appropriate authorities.

An insurance broker can help review insurance arrangements but does not replace the need to meet legal and regulatory requirements.

17. What Information Will My Insurance Broker Need?

If you are considering opening a home daycare, your broker may ask:

1. Is the daycare already operating, or are you planning to open it?

2. Will you operate independently or through a licensed home child care agency?

3. How many children will you care for?

4. What are their ages?

5. How many of your own children live in the home, and how old are they?

6. What are the daycare's operating hours?

7. Will you provide overnight care?

8. Will anyone else assist with supervising the children?

9. Will children be transported in your vehicle?

10. Will you use outdoor play equipment, a swimming pool or other recreational facilities?

11. Are any renovations or modifications planned?

12. What is the value of your daycare equipment?

13. Do you already have liability insurance through an agency or another provider?

The answers help determine which insurers may be willing to consider the operation and what coverage may be available.

Providing complete and accurate information is important.

18. What Should I Do Before Opening a Home Daycare?

Before accepting children into your care, take the following steps:

• Confirm the Ontario child care rules that apply to your proposed operation.

• Check applicable municipal and property requirements.

• Contact your home insurance broker.

• Fully disclose the daycare activities you intend to provide.

• Ask whether your current insurer will permit the daycare.

• Review available daycare liability insurance options.

• Confirm whether business property and equipment are covered.

• Discuss any employees or assistants.

• Review automobile insurance if children will be transported.

• Obtain confirmation of the coverage arrangements before operations begin.

If your daycare is already operating and you have not informed your insurer, contact your broker promptly.

Do not wait until your next renewal.

Protecting Your Home, Your Business and the Children in Your Care

A home daycare can provide a valuable service to families and a meaningful business opportunity for the operator.

However, caring for children in your home creates responsibilities that should not be overlooked.

The fact that a daycare is small, part-time or permitted under Ontario's unlicensed child care rules does not mean that it is automatically insured.

Likewise, coverage through a licensed home child care agency may not replace the need to review your personal home insurance.

At L.D. Dermody Insurance Brokers, we can help Ontario homeowners understand the insurance considerations associated with operating a home daycare and explore appropriate coverage options.

If you are planning to open a home daycare, or already operate one and are unsure whether you have adequate insurance, contact L.D. Dermody Insurance Brokers before a claim occurs.

This article provides general information for Ontario home daycare operators as of October 2026. Insurance availability, coverage, eligibility, limits, deductibles, conditions and exclusions vary by insurer and policy. Ontario child care rules and municipal requirements may change. Always confirm current regulatory requirements and obtain insurer approval for your specific daycare operation.