Willful damage won't be covered, but scrapes and bruises that knock keys or valves out of alignment should be. Ask about the details, including theft coverage. Instruments should come with a proper mouthpiece, basic cleaning and maintenance supplies like cork grease, valve oil and swabs and, for clarinets and saxophones, a few reeds. Dealers should include the method book required by your child's band director. Some include music stands.
Some band directors recommend a special mouthpiece or other particulars.
A store may charge an upgrade fee. There's a reason that generations of students have started on Buffet clarinets, Bach trumpets, Yamaha saxophones or Gemeinhardt flutes. They represent the always critical balance of quality and value. On the other hand, you do have choices. Ask the band director, professional musician or reputable dealer for advice.