This essay evaluates the role of social capital as a risk-coping device in rural communities of India's Andhra Pradesh state. Focusing on health outcomes among children between the ages of 1 and 9, I test whether social capital serves as an insurance mechanism and helps households minimize the negative impact of income shocks. Negative shocks considered are of two types: individual-household level shocks and common (or aggregate) shocks affecting more than one household. Death or serious illness in the family is an example of the former, while crop failure and droughts are examples of the latter category. Similarly, social capital is also of two types: associational and trust-based. Associational social capital is derived from one's network of family and close friends, while trust (or civic-cooperation) social capital is a measure of how involved the citizenry is in local political and civic issues. The econometric methods used include fixed effects, pooled-OLS and a Hausman-Taylor specification. I find that while aggregate shocks do not have a negative impact on children's development, individual household shocks do. Moreover, associational social capital helps mitigate the impact of these shocks and appears to be serving an insurance role, while trust-based social capital does not have a similar impact. A second result of importance is that within associational social capital, smaller networks of 1-5 family members appear to better mitigate risk compared to larger networks. Similarly, family networks comprised of influential members of the community help more relative to those without influence. These results are presented with the caveat that there is likely to be significant endogeneity in group formation in an environment where shocks are correlated with each other over time. While the statistical techniques used are aimed at overcoming this problem of self-selection into groups, some residual bias likely persists.