OIC submits report on insurance for child housing service providers to Legislature

OLYMPIA, Wash. — The Legislature will have several options to consider in addressing issues with the availability of insurance coverage for child housing service providers licensed by the Department of Children, Youth and Family Services, according to a report submitted to the Legislature on December 31 (PDF 2.80MB).

The report explores the availability and affordability of insurance for child placing agencies (CPAs), group foster homes (GFHs), childcare centers, and family childcare homes licensed by the DCYF. It also, in accordance with the Legislature’s request, examines those providers’ barriers in accessing adequate property and liability coverage and considers how a joint underwriting association might address those insurance needs.

Joint underwriting associations are nonprofit risk pools established by the insurance industry to address a lack of availability for certain lines of insurance. 

“This report confirms that our child placing agencies and group family homes are facing an insurance affordability and availability crisis,” Washington state Insurance Commissioner Patty Kuderer said. “And we’ll need solutions beyond a joint underwriting association to fully address those issues.”

The report focuses on liability coverages, which include professional liability insurance, sexual abuse coverage, and excess or umbrella coverage. CPAs and GFHs, in particular, are able to find liability coverage for events that may occur in the future, but many insurance companies are unwilling to provide new coverage for potential acts in the past. Without coverage for those prior acts, which could have occurred years in the past, CPAs and GFHs run the risk of financial collapse in the event of a lawsuit.

The report doesn’t recommend establishing a joint underwriting association to address the issue for CPAs and GFHs, largely due to the high premiums that would be actuarially required to cover the expected losses. It does, however, note that the risk could be mitigated by allowing the joint underwriting association to write coverage with tightly constrained prior acts coverage, or coverage limited to prospective acts.

Liability insurance for childcare providers, on the other hand, does not appear to have an availability issue, according to the report.

Legislative options to address insurance availability for CPAs and GFHs include:

• Changing DCYF contractual language to remove requirements for CPAs and GFHs to carry coverage that protects DCYF and its employees, even in circumstances where the CPAs and GFHs were not the immediate cause of the injury or loss.
• Changing the standard of fault to shield CPAs and GFHs from liability if they comply with statutory standards.
• Creating a settlement fund to pay for historic losses once insurance limits are reached, so long as the CPA or GFH met certain requirements when the incident occurred.
• Increasing the rates paid to CPAs and GFHs to better enable them to pay insurance premiums.

The report also recommended a joint underwriting association under the condition that actions were taken to mitigate the risk it would cover and that it join with other jurisdictions to encourage federal action to address victim compensation. 

“The Legislature has some tough decisions ahead, especially considering our current budget environment,” Kuderer added. “With the national trends we’re seeing with these critical organizations, we may need federal action as well.” 

The state’s 2025 supplemental operating budget directed the OIC to “study the feasibility of using a joint underwriting association to provide property and liability insurance coverage” to the applicable child housing and service providers and to deliver the report by the end of 2025. 

The state’s 2024 amendment removing the statute of limitations for civil claims of childhood sexual abuse prompted concerns that certain youth and child-serving organizations could become uninsurable.

Washington already had a broad statute of limitations, however, and the report said there was no data to support the idea that the 2024 change — which took effect in June of 2025 — would increase overall liability exposures.

The OIC contracted Davies Actuarial, Audit & Consulting, Inc., to prepare the report, which included interviews with child housing and service providers, staff at DCYF and other state agencies, and insurance brokers.

The OIC delivered a report to the Legislature on liability insurance for adult family homes in July of 2025.