If the baby or toddlers diaper is covering the belly button then the diaper is usually too big.
A diaper that is the proper size for your baby or toddler should have the waistband just below the belly button and the belly button should be exposed when the diaper is fitting properly.
You should also be able to fit 2 fingers into the waistband of the diaper and if not then the diaper is on too tight and you should loosen the diaper a bit.
It's not a big problem though if the diapers are a bit too big and covering the babies belly button or the toddlers belly button as long as the diapers are not so big as they fall down or sag or leak on the baby or toddler.
My toddlers have had diapers that were a bit too big on them that covered there belly button but eventually they got big enough to where those bigger diapers fit them much better.