Early this year, a child care program in southern Maine was dinged for three minor issues during a routine inspection: A refrigerator at the school where the nonprofit operates was a couple of degrees too high. An employee’s paperwork was kept at the wrong location. A first aid kit was missing a pair of tweezers.
After Windham Raymond School Aged Child Care, which runs after-school programs in local schools and has a five-star quality rating with the state, quickly fixed those problems, program director Hannah Marshall didn’t think much of it.
Then, over the summer, she got a notice in the mail from the center’s liability insurance company that it was dropping the center’s policy. Even though the center’s licensing and accreditation were never at stake, the insurer said it would no longer cover the program.
“Immediately I offered to get a letter of good standing from licensing, because we are in good standing,” Marshall said. “What we heard from our broker is that they were looking for reasons to drop child care programs.”
30% to 300% price increases
Child care providers across the country are reporting higher liability insurance costs, reduced coverage and policies being dropped altogether. Liability insurance, which typically protects child care providers from lawsuits related to injuries and accidents, is required for traditional child care centers in 30 states.
A survey of more than 1,100 child care providers from 49 states and Washington, D.C., released in August by the National Association for the Education of Young Children found that about 80% had seen their liability insurance costs go up in the last year. The issue has ballooned into a crisis for child care centers, which already operate on thin profit margins. When centers have to pay more for insurance, parents have to pay higher tuition, said Heather Marden, co-executive director of the Maine Association for the Education of Young Children.
“Families cannot bear this financial burden being passed on to their child care costs,” Marden said. “That’s why from our lens as an organization, we talk about child care needing to be invested in more heavily as a public good so that these businesses are not being shut down every time pricing fluctuates.”
