What landlords require of childcare centres: lease insurance clauses for daycare and preschool tenants and how to prove you meet them

What your landlord requires when the tenant is a childcare centre

QUICK ANSWER

A childcare or preschool lease typically requires general liability of $1M per occurrence and $2M aggregate with the landlord as additional insured and with sexual abuse and molestation coverage not excluded, professional liability for care and instruction, an umbrella of $1M to $3M, replacement-cost property on the classroom build-out and playground, business income, workers' compensation, auto where children are transported, and a waiver of subrogation; the lease also expects the centre to hold its state licence.

Reviewed by Michael LaBarbera, Licensed property & casualty agent, Provident Financial Group · Reviewed Oct 11, 2026 Updated Oct 14, 2026

Typical requirements and how to check them
Requirement	What they usually ask for	How to check what you have
Commercial general liability	$1M each occurrence / $2M general aggregate with the landlord, property manager and lender as additional insureds, primary and non-contributory, written on a form without an abuse exclusion	Dec page limits, the additional insured form, and the exclusions page; many general forms exclude abuse and molestation entirely, which fails the lease.
Sexual abuse and molestation coverage	$1M per occurrence / $2M aggregate, either within the general liability policy or as a separate coverage part, often on a claims-made basis	A coverage part or endorsement with its own limits and basis; a sub-limit below $1M usually fails the lease and state licensing expectations.
Professional liability	$1M per claim for care, supervision and instruction, including administering medication where the centre does so	A childcare professional liability coverage part or separate policy; general liability covers bodily injury on the premises, not the quality of care.
Umbrella or excess liability	$1M to $3M above general liability, abuse coverage, auto and employers' liability	A separate umbrella scheduling each underlying policy; confirm it follows form over the abuse coverage, which many umbrellas exclude.
Property on the build-out, equipment and playground	Replacement cost on classroom improvements, furniture, kitchen equipment, playground structures and surfacing, and outdoor fencing	Business personal property and tenant improvements limits; playground structures are outdoor property that some forms limit, so confirm the sub-limit.
Business income	Rent and continuing expenses through a covered closure, commonly twelve months	Business income line on the property policy and its period of restoration; licensing re-inspection after a loss can extend a closure.
Workers' compensation and auto	Statutory workers' compensation plus employers' liability; commercial auto of $1M combined single limit with hired and non-owned where children are transported or staff drive for the centre	The workers' compensation information page; the auto dec page and the hired and non-owned endorsement, with the vehicles used for field trips scheduled.
Waiver of subrogation and licence	Waiver in favour of the landlord on each policy; a current state childcare licence as a lease condition	Endorsements on each policy; the licence certificate kept with the lease documents.

Requirement

What they usually ask for

How to check what you have

Commercial general liability

$1M each occurrence / $2M general aggregate with the landlord, property manager and lender as additional insureds, primary and non-contributory, written on a form without an abuse exclusion

Dec page limits, the additional insured form, and the exclusions page; many general forms exclude abuse and molestation entirely, which fails the lease.

Sexual abuse and molestation coverage

$1M per occurrence / $2M aggregate, either within the general liability policy or as a separate coverage part, often on a claims-made basis

A coverage part or endorsement with its own limits and basis; a sub-limit below $1M usually fails the lease and state licensing expectations.

Professional liability

$1M per claim for care, supervision and instruction, including administering medication where the centre does so

A childcare professional liability coverage part or separate policy; general liability covers bodily injury on the premises, not the quality of care.

Umbrella or excess liability

$1M to $3M above general liability, abuse coverage, auto and employers' liability

A separate umbrella scheduling each underlying policy; confirm it follows form over the abuse coverage, which many umbrellas exclude.

Property on the build-out, equipment and playground

Replacement cost on classroom improvements, furniture, kitchen equipment, playground structures and surfacing, and outdoor fencing

Business personal property and tenant improvements limits; playground structures are outdoor property that some forms limit, so confirm the sub-limit.

Business income

Rent and continuing expenses through a covered closure, commonly twelve months

Business income line on the property policy and its period of restoration; licensing re-inspection after a loss can extend a closure.

Workers' compensation and auto

Statutory workers' compensation plus employers' liability; commercial auto of $1M combined single limit with hired and non-owned where children are transported or staff drive for the centre

The workers' compensation information page; the auto dec page and the hired and non-owned endorsement, with the vehicles used for field trips scheduled.

Waiver of subrogation and licence

Waiver in favour of the landlord on each policy; a current state childcare licence as a lease condition

Endorsements on each policy; the licence certificate kept with the lease documents.

Why childcare leases ask for more

The landlord's exposure in a childcare lease is the children: injuries, allegations of abuse, and a closure that follows a licensing action. The exhibit asks for liability forms that do not exclude abuse claims, a dedicated abuse coverage part at a real limit, professional liability for the care itself, an umbrella above, and property language that reaches the playground. It also expects the state licence to stay current, because the licence is what allows the use.

The lines a childcare lease names

General liability with the landlord added must be written on a form without an abuse exclusion. Abuse and molestation coverage carries its own limits. Professional liability covers care and supervision. The umbrella sits above, though it may not follow the abuse layer. Property covers the build-out and the playground. Business income covers rent during a closure. Workers' compensation is statutory, and auto applies wherever children ride in a vehicle the centre controls.

How to check your policies against the lease

Read the general liability exclusions page before the limits. Confirm the abuse coverage part, its limits and basis. Confirm professional liability. Check the umbrella's underlying schedule and exclusions. Review property limits for the playground sub-limit. Find the business income line, the workers' compensation information page and the auto schedule. Then confirm the waiver of subrogation on each policy and keep the licence with the lease.

Keep the certificate current

Childcare leases require a renewed certificate at each renewal and notice of cancellation, and state licensing often asks for the same evidence. A live certificate link stays current and notifies the landlord when a line changes, with the official PDF attached, so the landlord and the licensing file see the same thing.

Questions people actually ask

Why does the lease name abuse and molestation coverage specifically?

Because it is the claim a childcare landlord fears most and the one that standard general liability forms exclude. The lease makes the centre show the coverage exists at a full limit rather than a token sub-limit.

Does our umbrella cover the abuse limits too?

Only if the umbrella follows form over that coverage. Many umbrellas exclude abuse and molestation, so the exhibit's umbrella requirement can be met for liability while leaving the abuse layer at the primary limit. Check the umbrella's exclusions.

The playground is on the landlord's land. Who insures it?

Usually the tenant, as a tenant improvement, and the lease will say so. Outdoor property often carries a sub-limit on property forms, so confirm the structures and surfacing are covered at replacement cost.

We transport children in a leased van. What does the lease want?

Commercial auto at a combined single limit, typically $1M, on a policy that schedules the van, with hired and non-owned coverage for staff vehicles. A personal auto policy will not satisfy the landlord or the state licensing agency.