High insurance costs are putting child care programs out of business — but bill proposes solution

No one likes to deal with or pay for insurance, and child care providers are no exception. 

Under state licensing rules, early care and education programs are required to have liability insurance or disclose to parents that they are uninsured. Having a liability policy protects high-risk businesses, but expensive and hard-to-find plans are hurting an industry already facing thin financial margins and availability issues.

“Liability insurance is mind-boggling,” said Marrianne Barter. “If you even find it, you’re going to pay through the nose for it.”  

Barter, the executive director of Merrimack Valley Day Care, said that despite how expensive it is, providers would be “out of their minds” to not have liability insurance because of the high risk of a child getting injured. 

“You could get sued at any time,” she said. “These are other people’s children. This is the most important thing in someone’s life and they’re entrusting it with you every single day. The risk involved with that is incredible.”

Last summer, Barter almost had to close the center when her old insurance agency stopped providing liability insurance to child care programs. As a nonprofit, if the center were sued, Barter would be personally liable as the executive director.

This is a recurring problem for New Hampshire providers. Agencies either stop offering liability insurance or raise policy prices because of the high risk potential. Costs are also rising because programs, regardless of their quality, are being weighed the same. 

“What [agencies] are starting to look at is mitigating risk,” said Katie Brissette, deputy director of Early Learning New Hampshire, in an interview in December. “The good programs and the bad programs all get thrown together under one umbrella. Even if you have no claim and a perfect record, your rates are still going to go up because you’re a child care program, and you’re dealing with children.”

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One bill proposed this legislative session aims to put liability risks in the hands of the community. 

Senate Bill 614 allows any child care, foster care, or behavioral health program to enter into a “multiple-caregiver self-insured risk coverage arrangement” to help deal with rising insurance costs. The bill allows two or more providers to enter into a formal arrangement monitored by the New Hampshire Insurance Department to fund and manage their financial exposure to liability risks. 

By being part of the arrangement, providers would be able to jointly self-insure against liability risks, purchase insurance together, contract for risk-management claims and administrative legal services, and require their partners to contribute to a reserve fund to cover expenses. 

The bill is based on an existing law in Washington state that allows child care programs to use self-insurance pools instead of getting a policy through an insurance agency. According to Sen. Denise Ricciardi, a Bedford Republican and SB 614’s prime sponsor, programs will be able to reduce insurance costs by combining their resources, similar to how regular insurance works. 

In a consent calendar vote — a group of bills that are not debated on the floor and are acted upon with a single vote — the New Hampshire Senate voted to pass SB 614 on first reading. 

“I couldn’t be prouder that we put so much work into this bill and to get it across the finish line,” Ricciardi said. “The main focus is to help our child care providers and reduce costs for their insurance. We need more child care providers and keep the ones we have. … This is a step in the right direction.”

As the bill goes to the Senate Finance Committee for its second hearing, providers continue to look to the state for assistance. Insurance Commissioner DJ Bettencourt said reducing the costs of child care and barriers for providers is a “priority” for Gov. Kelly Ayotte and the department. 

“We are engaging with providers to better understand the challenges they face and are working with the governor’s office, Legislature, and industry partners to develop solutions that will help more families access affordable child care.”

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