The allegation nobody licenses you for, and nobody sells you by default.

Oregon's early learning agency put the problem in writing. Its Preschool Promise accountability report describes reviewing certificates of insurance before executing any grant agreement, and states: "This is particularly challenging for small businesses accessing Sexual Abuse and Molestation insurance, as it is an unrelated sector of the insurance market. However, failure to meet required insurance limits resulted in an inability to proceed with the grant with the ELD" (Oregon Department of Early Learning and Care, Preschool Promise accountability report, accessed August 7, 2026). Two qualifiers travel with that quote: the report does not state the dollar limits, and says only that the agency worked with the Department of Administrative Services to keep them available and reasonable, and it uses the predecessor agency's name. We don't publish a limit we haven't read.

The situation this coverage is about

A parent reports something to the licensor. An investigation opens. You are named. Nothing has been proved and it may never be, and you still need a lawyer, this week, and the licensing agency needs answers, and every other family in your program is going to hear about it.

That is the shape of an abuse allegation in a home program, and the reason it needs its own coverage is that most liability policies were built to keep it out. Where the coverage exists at all it is usually bought back by endorsement, and the buy-back has its own rules.

What makes it sharper in family child care than in a center is the household. Oregon's licensing rules require every resident of the home aged 18 or over to be enrolled in the Central Background Registry before a registration issues, require residents under 18 to enrol by their eighteenth birthday, and require confirmation before anyone 18 or over can reside in the home, stay overnight more than 14 consecutive days, work there or volunteer (OAR 414-210-0310, effective July 1, 2025). The regulator has drawn its line around your family. An allegation involving a person the state screened is not an exotic scenario, it is the scenario the screening exists for.

What the coverage generally does

Abuse and molestation coverage responds to claims alleging actual or threatened abuse or molestation of a person in your care. Broadly, that means two things: it pays for the defence, and where the policy covers it, it pays damages within its own limit. Defence is often the larger part in practice, because these allegations get investigated long before anyone establishes liability.

It is usually written as an endorsement to a liability policy rather than as a standalone contract, which is why the important numbers sit on the endorsement rather than on the declarations page summary.

Nothing in the law of any of the three states shapes what that endorsement says. Washington came closest to defining a child care coverage and stopped well short of this: RCW 48.88.020(2) defines day care insurance as coverage against liability for "the death or injury of any person as the result of negligence or malpractice in rendering professional service by any licensee" (RCW 48.88.020, enacted 1986). No abuse, no molestation, no property damage, no aggregate. A Washington provider who buys exactly what the statute contemplates has not bought this coverage.

What it does not cover, and where it stops

Intentional conduct by the person who did it. These endorsements generally don't stand behind the perpetrator. The coverage is aimed at the business and at people alleged to have failed in hiring, screening, training or supervision.

Everything outside the limit. The endorsement's limit is frequently smaller than the policy's liability limit, and where defence costs come out of it, the money available to resolve anything is smaller again.

Conduct outside the period the trigger reaches. This is the one that catches people. On a claims-made basis, an allegation about a period years earlier may not be covered by a policy bought today, and a policy you cancelled may not answer for the years it was in force. On an occurrence basis the analysis is different. Find out which one you have.

The licensing consequence. No insurance policy stops a licensing agency doing what it is going to do. Coverage funds a defence and, where it applies, a settlement. It doesn't protect the registration.

What varies, and what to read on the endorsement

Stated as variation, because this genuinely differs from carrier to carrier and form to form.

• The limit. Whether it shares the policy limit or carries its own, and whether there is a separate aggregate.
• The trigger. Claims-made or occurrence, and if claims-made, the retroactive date and whether extended reporting is available.
• Who is an insured. Whether assistants, volunteers, household members and former staff are inside the definition.
• Defence. Inside the limit or outside it, and who chooses counsel.
• Conditions. Some endorsements attach requirements around screening, training or supervision practices. Those are worth reading before a claim rather than after.

What drives eligibility and price for this coverage

We publish no premium figures. On eligibility, the fact base for this build contains no carrier documentation, so we won't tell you which markets write this class or on what terms, and any page that does without a dated carrier document is guessing. What we can say from experience placing it is that the underwriter's questions concentrate on who has contact with the children, how they were screened, what your written policies say about supervision, bathroom and diapering practice and one-adult-alone situations, and your history. Oregon providers have an advantage on the screening question, because the Central Background Registry gives them a documented answer.

The other practical driver is your instrument. A home policy endorsement is a limited vehicle for this coverage. If a grant or a contract has asked you for it at named limits, the instrument decision usually has to be settled first.

How this fits with the rest of the program

This sits alongside the liability coverage rather than inside it, and the overlap is worth understanding. A supervision failure that results in a physical injury is a liability claim. A supervision failure framed as having allowed abuse to occur is this claim, and the same set of facts can be pleaded either way. Where the two coverages carry different limits and different triggers, how the plaintiff's lawyer writes the complaint can decide which one answers.

If your program takes state money, read the subsidy contract article before you assume a requirement exists or does not. Most of the subsidy programmes in the three states ask for nothing at all.

Richard Sweet, owner of Vantage Point Risk and an independent insurance advisor. Last reviewed August 10, 2026. How we review this.