I don't serve any nut products in the daycare either even though I don't accept kids with nut allergies into care. I am just concerned about the young ones who haven't yet tried nuts and may have their first reaction here...not a position I want to be in. However, this is easy for me because I have a separate basement daycare with it's own kitchen...my family eats tons of nuts in the upstairs kitchen and I don't have to worry. That said, I still would not take on an allergic child because the risk is just too high for me and I don't want that extra liability. In your case, I would either agree to not serve nut products or I would terminate care. It is a huge risk to continue exposing the child the nuts...sometimes reactions can be worse over time. I wouldn't want to take that risk.