Home day cares often lack insurance
Home day cares often lack insurance
By Randy Ellis and Nolan Clay
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Published: January 13, 2008
Oklahoma law does not require child care centers to carry business liability insurance, but many choose to carry it anyway, said Kathy Cronemiller, president of Oklahoma Child Care Association.
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Why coverage is lacking?
A lot of family day care operators think they are covered through their homeowners' insurance, Cronemiller said.
They are often mistaken because homeowners' policies frequently contain a business exclusion clause. When an accident happens, the insurance company will deny the claim when it discovers children were being kept in the home and the operator had a license, she said.
"They don't realize that they have to go out and purchase additional insurance,” Cronemiller said. "They think they're covered until something happens and then it's too late.”
Cronemiller said her association plans to support legislation to require day cares to carry liability insurance and is working with a lobbyist on language to be included in the bill.
"We think we all need this insurance,” she said "And by making this law, it means DHS would have to enforce it. Right now, there's nobody that looks out for the parents that put their children in day care homes. ... How can you be caring for somebody's children today and not have any kind of insurance to back you up in case something happens?”
Reasonable rates sought
Cronemiller said her association already has been doing research to find reasonable insurance coverage for day care homes.
She said their research shows a family day care home could get liability insurance coverage up to $500,000 on each incident for $700 a year.
While situations vary, it likely would cost parents about $5 more per week if the costs are passed on to them, Cronemiller said.
Until recently, the issue of whether day cares should be required to carry liability insurance hasn't attracted much attention at the Department of Human Services.
Stephanie Bond, DHS communications manager, said the agency's day care licensing division has focused its attention on rules that protect the safety and health of children.
Insurance was considered to be a business decision to be made by the operator, she said.
"When we do our training of child care providers, we always encourage them to run their facilities like a business, which would include insurance,” she said.
DHS officials believe a couple of things need to be carefully considered in deciding whether to make liability insurance mandatory.
One issue is cost, Bond said.
"It could be cost- prohibitive to some child care providers,” she said.
Who would pay?
Costs would likely be passed on to parents and to taxpayers through DHS, which helps subsidize child care for low income individuals.
Another issue is enforcement. The wording of insurance policies varies greatly and DHS licensing officials are not insurance policy experts, Bond said. It would be difficult for them to judge whether policies meet minimum requirements.
Bond said DHS likely would turn to the state's Child Care Advisory Committee or the Legislature for guidance on the issue.
Doug Gibson, chairman of the Child Care Advisory Committee, said he can't remember the issue of mandatory insurance coming up in the past 10 years.
"I'm a little bit surprised by it, quite frankly, that they don't require liability insurance already,” he said. "Upon request, I think that's something we could look at.”
Cronemiller said her association is working to develop an insurance package that could be made available to home day cares at the best rate possible.
"We're trying to put a package together,” she said. "We don't want our family day care homes to close, but at the same time, we have to protect the children in case something happens.”
The association has negotiated a group insurance program for child care centers that provides three-star centers with a 25 percent discount off normal insurance rates, she said.
DHS uses a star designation to recognize child care centers that exceed minimum requirements.
A day care center with 50 children currently pays roughly $3,000 to $4,000 a year for liability and accident coverage, depending on how many millions of dollars in coverage they want, Cronemiller said.
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