Resources & Insights

Managing Increasing Child Care Insurance Costs

March 13, 2024

Staying proactive in a challenging market.

Much like the price hikes you see at the grocery store and in personal home and auto pricing, similar trends affect all commercial insurance forms – especially child care insurance.

We’re currently experiencing a hard market, which means insurance premiums rise, coverage terms tighten, and the capacity for various types of insurance decreases.

Here’s what that means for your business.

Market Factors are Driving Up Costs

A typical annual increase was 6-9% a few years ago. Fast forward to today, and 15-25% increases are often the norm. If you have specialized circumstances, the increases could be as high as 70%-90%+.

Some insurance companies are leaving the child care market entirely, so it’s more important than ever to be proactive and prepared for your insurance renewal.

A combination of factors are impacting the market, including:

  • An increased number of claims
  • Higher claim judgments and settlements
  • Inflation
  • Increased construction and labor costs

These numbers aren’t meant to scare you – we just want to share a realistic picture of the market. CCIG is working diligently to support our child care and early education clients by leveraging our longstanding underwriter relationships and niche expertise.

Proactive Steps We Can Take Together

We know it’s overwhelming to navigate a shifting insurance landscape, so let’s work together to protect your investment and your business with forward-thinking risk management options.

CCIG is well-versed in the specialized child care insurance market. With almost four decades of experience in the industry, our established underwriter connections and extensive background knowledge empower us to deliver solutions for our child care and early education clients in a challenging market.

Our team can review your risk management profile and create a personalized approach designed to position you favorably with carriers.

Prioritize Inspection Preparation and Reporting

Insurance underwriters (the big decision-makers) rely on inspection reports as one of many tools they use to assess risks, and they can draw a possible correlation between a higher number of licensing violations and higher claims.

Underwriters commonly review at least three years of inspections and look for patterns of behavior or indications of overall management practices, quality of care, and condition of facilities.

  • For frequency, concerning patterns of behavior that can indicate poor management or staff training practices include:
      • Inadequate documentation practices for staff and children
      • Unsafe classroom materials or “keep out of reach” supplies repeatedly accessible by children
      • Lack of documentation of required safety drills over multiple inspections
      • Consistently finding lots of broken toys or poorly maintained premises
  • For severity, situations that could lead to serious claims and indicate heightened risk can include:
    • Allegations of abuse (whether founded or not)
    • Certain types of injuries
    • Classrooms being left out of ratio
    • Staff not providing proper headcounts when asked
    • Unsafe infant sleeping or feeding practices

Depending on your state, the inspection, injury, and other reports are often available to the public. In Colorado, you can find these reports on Colorado Shines.

This means everyone, from potential families to insurance underwriters, can read and review these documents.

  • Evaluate each section carefully. Correcting licensing violations promptly doesn’t escape underwriters’ scrutiny, as they use this information to assess risk. In addition, addressing less significant violations during visits doesn’t eliminate concerns if the same issues recur or multiple minor infractions persist during licensing visits.
  • If violations occur, implement a written action plan. This plan should aim to prevent future licensing issues, reminding the director and staff to keep all documentation updated and meet licensing requirements promptly.
  • If you are cited for a violation in error, consider disputing the inspection report. Request a revised report from licensing with the inaccurate item removed and retain all documentation related to violation corrections, appeals, or any other aspects of licensing inspections for inclusion with your insurance renewal documents.

Remember, staying proactive in managing your risk profile isn’t just a smart move – it’s a strategic way to stay ahead in a constantly shifting market.

Non-Renewal Options

We understand how frustrating a non-renewal notice can be, and our team can provide additional information and context if this happens to you. We can walk through the reasons for non-renewal and create a plan to move forward.

If you receive a non-renewal notice from your current insurance carrier, please note that they must mail the notice within a certain minimum number of days before the renewal date per state insurance laws (30 days in Colorado). Again, CCIG will partner with you to identify additional options to protect your business.

CCIG is Your Partner in a Complex Environment

At CCIG, we’ve supported childcare and early education businesses for more than 38 years. Child care providers are the heart of a strong community and a thriving economy.

Your contributions matter, which is why we’re putting in the work to make sure you’ve got the specialty insurance coverage needed to safeguard your business. Please don’t hesitate to reach out to if you have any questions or concerns about your program.

Share this:
Back to Resources

Contact Us

Call us at 303-799-0110 or reach out by filling out a short form.

Get In Touch