Posted in Business Practice

Liability Insurance? Why?

Why do we need liability insurance when we have homeowners insurance?

Liability Insurance is not required to be licensed in Maine, but it is strongly encouraged.

Why is it encouraged?

Homeowner insurance policies generally exclude coverage for any business operation. Although some Homeowner insurance policies allow endorsements to be purchased that protect your business. For ones that do not allow endorsements, Liability Insurance provides the insurance protection for the child care business.


While DHHS in Maine does not require family child care providers to carry liability insurance, you may find that your homeowners insurance does. Do not expect that your homeowners policy will cover you for liability charges or property damage stemming from your home business. You may even find that your insurer may refuse to renew your homeowners policy if you are not willing to carry liability insurance.

Family child care businesses are not immune from liability lawsuits. The cost of defending yourself can be significant. Liability insurance is structured to cover the legal fees associated that arise from a covered event.

  • General liability: coverage for property damage or personal injuries suffered by third-parties while they are in your place of business. If a child sustains an injury that requires medical attention, your business may be liable for the expenses.
  • Premises liability: coverage for the area surrounding your child care facility including the parking lot and play areas. If an injured is found to be due to failure to properly maintain a safe environment, the business may be held liable incurred medical bills or property damage.
  • Non-owned or for hire auto liability: covers privately owned vehicles when they are being used to transported children for the purposes of field-trips or other outings.
  • Professional liability: covers yourself and any professional staff. Think mental, physical or emotional abuse of the children.

How much insurance is needed?

For most family child care providers, specialists suggest carrying Liability Limits of: $1,000,000 per occurrence / $3,000,000 aggregate.


FCCAM works to unify, promote and strengthen quality professional family child care in Maine. We are the state affiliate of the National Association for Family Child Care (NAFCC). We are the only professional association in Maine dedicated specifically to supporting family child care providers. FCCAM understands the critical role of family child care providers in the lives of children and families. We also understand the hard work and long hours that are required to provide the much needed child care services in Maine’s diverse communities. FCCAM provides opportunities to network both locally and statewide with other family child care professionals for training and support. Through collaboration with other organizations we are engaged with advocating for children and their families in Maine, increasing awareness of our professionalism and value to our communities.