Rose Marie Smith, the longtime director of Mt. Washington Children’s Center, reads a story to kids before their breakfast on July 26, 2023. Insurers have suddenly stopped offering or altered liability insurance to numerous local daycares, causing stress and increased financial burdens. (Photo by Alexis Wary/PublicSource)
Already strained childcare providers are facing dwindling insurance options.
by Rebecca Spiess, PublicSource
While local childcare centers continue to grapple with harsh economic realities, some now find themselves confronting an additional burden as a spate of insurance companies have recently dropped or altered their liability insurance policies.
In March, Heather Wells, the director of The Growing Garden Childcare Center in Tarentum, received a letter from her insurance provider saying they would not renew her policy. At the time of her July 20 interview with PublicSource, Wells had just three days left to find new coverage.
This was despite her insurance broker’s best efforts, she said.
“I’m very scared, because, I’m like, ‘What’s it going to cost me in the next three days?’” she said. “I don’t have a lot of time, and my agent has been working on this relentlessly for weeks.”
Childcare providers are required by state law to hold liability insurance at all times, so an unexpected drop in coverage or change in policy is an immediate concern for the daily operations of any childcare center. The average cost of liability insurance for commercial daycare centers varies, but for the daycare centers interviewed by PublicSource, the financial burden has generally constituted anywhere from roughly $1,000 to $3,000 per year.
This additional cost burden is hitting facilities already facing severe staffing shortages — nearly 90% of Allegheny County facilities say they are understaffed, according to Start Strong PA, a statewide advocacy campaign focused on affordable early learning. In a county where 5,851 children are on waiting lists, Start Strong PA indicates that around 80% of the need could be addressed if existing facilities simply had enough staff to fully utilize classrooms.
The state Department of Human Services as well as the Pennsylvania Insurance Department have responded to reports of these difficulties by conducting several surveys to establish the prevalence of the issue.