Peer-to-peer idea exchange is one of the hallmarks of the Alliance for Early Success grantee network, and often–when a discussion starts to generate broad interest–grantees will convene in an Alliance “huddle” to have a more in-depth conversation. Alliance state allies recently gathered to discuss the challenges created by the rising cost of liability insurance in their work.
The discussion focused on two growing challenges: the rising cost of liability insurance and the availability of coverage. In addition to the rising costs, providers are also finding limited options because of several reasons. Insurance companies have stopped working in their state, or they don’t cover child care programs anymore. Providers also report insurance plans with limited coverage and getting denied for coverage.
Our partners at NAEYC facilitated the conversation and shared data about providers reporting increased costs, and described experiences of different types of program, such as program setting (homes or centers), geography (urban or rural), size of the program, minority-owned businesses, etc.
The group discussed some potential action steps to take:
Educate insurance and licensing agencies on the context and impact of regulations and citations, and help them work together to support safety, clarity, and consistency.
- Insurance companies often pull state reports and use that data to inform how much they charge programs for premiums, but they may not distinguish violations that compromise health and safety of the children and those that don’t.
- Advocates can educate insurance companies and work with licensing agencies to develop better communications tools that make these distinctions clearer.
- Providers can also challenge the findings of the report or how the violation is worded.
Educate policymakers about the cost of lowering standards that support the health and safety of children (e.g., minimum age or qualifications for staff, group size and ratios, etc.)
- Utah advocates discussed opportunities to work with insurance companies to testify about the importance of quality standards.
- Some wondered if there is a way to quantify the financial cost of deregulation proposals if they make it more difficult for providers to get insurance coverage.
Directly subsidize and/or control the costs of insurance through discounts, reinsurance pools, caps, policy changes, and other mechanisms.
- The discussion did not include actual policies for subsidizing insurance costs, but the idea of state tax credits for liability insurance was offered – although that won’t work for nonprofits or states with no income tax.
- As policymakers see the need to address the cost of insurance generally (e.g., homeowners, commercial properties), early childhood advocates can work to add child care to the agenda.
Encourage advocates and policymakers to learn more about what’s happening in their own communities, including by commissioning legislative and research studies on the availability and affordability of liability insurance.
- Nebraska proposed a bill to do this in 2024.
- Vermont issued guidance to support the inclusion of community- and home-based child care and early learning programs in state-funded ECE programs
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