Childcare facilities say they may be forced to increase fees for thousands of parents in the New Year, while some providers say they may be forced to close because of big hikes in insurance renewal quotes.
More than 1,000 providers are directly affected by the increase, which comes into effect from January.
Some crèches and playschools are being quoted more than double or triple their current insurance policies in quotes from insurance broker Arachas from insurance company Allianz.
It comes after one of the biggest insurers in the market, Ironshore, announced it was withdrawing from the early care sector.
One crèche owner in Dublin, who was paying €3,083 in insurance, has received a quote for over €9,400 from the broker Arachas through Allianz insurance.
A spokesperson for Arachas said: "Our role as a broker is to work on behalf of our clients by going to the insurance market and identifying insurance providers who are willing to provide cover based on a number of factors and to provide a quote or a range of quotes for our customers.
"It has become increasingly difficult to source insurance providers and many have exited after suffering losses due to market conditions and the costs of claims in this sector."
Another childcare provider was paying €1,613 last year and has received a quote for €3,897 through the same broker and insurance company.
A provider in Cavan has seen her insurance rise from paying €1,800 last year to a quote of €6,100 for the year ahead.
The facilities affected include smaller childcare providers, including some community crèches who are not members of Early Childhood Ireland.
Chairperson of the federation of early childhood providers Elaine Dunne has said the insurance situation has caused huge stress for providers and parents over the past few weeks.
She said that price hikes of over 100% are ones that sessional services can not afford. Ms Dunne added this could potentially close small services.
This also has a serious knock-on effect for full daycare services.
They have called on the Government to help the providers and the parents and to make a statement.
In a statement this afternoon, broker Padraic Smith said that due to the withdrawal of a key insurer in the market, they have 1,300 clients who will be directly affected come their January renewal.
It said the team at Padraic Smith & Co have been working tirelessly to secure alternative insurance options for their clients.
They said they will be in a position to report back to clients by tomorrow on any potential options available to them.
In a statement, Allianz said: "Allianz Ireland has provided sustainable and high-quality insurance cover to members of Early Childhood Ireland since 2014 through a group scheme administered by Arachas insurance brokers.
"We remain committed to the childcare sector despite a number of other underwriters joining and subsequently exiting this market in that time period."