Liability Crisis in Child Welfare Agencies

Georgia Association of Homes and Services for Children

October 24, 2004

Background: It appears that child services of many kinds are painted with the same brush; at least this is true when it comes to liability insurance. Liability insurance has skyrocked. Insurance companies sight the huge insurance settlements in regard to the atrocities in Catholic Church as part of the reason. However, the strong connection between child welfare services and church services not grasped with most observers except the actuaries of the insurance industry.

Every child welfare provider in the State is required to have liability insurance. In the last three years insurance costs have escalated by 50% or more. Some insurance companies have also shrunk coverage and put child caring agencies at a growing risk. Some insurance companies have outright cancelled policies. Since every child caring private agency is required to have insurance, these events have undermined many Georgia child welfare agencies and the care that they provide to abused and neglected children.

The bottom line reality is this: for every dollar spent on liability insurance is a dollar not spent on the care of children.

This liability exposure is not a risk associated with adult employee misbehavior, but also a risk that foster children may pose to themselves and others. Still, the liability and safety record of private child welfare agencies matches and exceeds that of the public sector. Unfortunately, the State does not share the liability risk with private providers. State run child welfare programs and along with their foster parents have civil immunity from liability. The “deep pockets” appear to be seen as the private providers, even when private providers offer a tremendous service in caring for children in state custody.

Without some relief of liability insurance premiums, child welfare agencies will soon be unable to do their job, to protect abused and neglected children, due to the substantial financial burdens of this insurance.

Solution Proposed: Legislative language such as proposed in Illinois (attached below) to include the following. “If the Department contracts with a private child welfare agency to provide child welfare services or to provide the arrangement of child welfare services, then the private child welfare agency and its employees shall not, as a result of their acts or omissions, be liable for civil damages, unless the acts or omissions constitute willful and wanton misconduct.”

93RD GENERAL ASSEMBLY

State of Illinois

2003 and 2004

HB4723

Introduced 02/04/04, by David R. Leitch

SYNOPSIS AS INTRODUCED:

20 ILCS 505/2.1

Amends the Children and Family Services Act. Provides
that if the Department of Children and Family Services contracts
with a private child welfare agency to provide child welfare services
or to provide the arrangement of child welfare services, then the
private child welfare agency and its employees shall not, as a
result of their acts or omissions, be liable for civil damages,
unless the acts or omissions constitute willful and wanton misconduct.

A BILL FOR HB 4723

1 AN ACT concerning children and families.

2 Be it enacted by the People of the State of Illinois,

3 represented in the General Assembly:

4 Section 5. The Children and Family Services Act is amended

5 by changing Section 2.1 as follows:

6 (20 ILCS 505/2.1)

7 Sec. 2.1. Sufficient resources required; liability. The

8 Department shall ensure a sufficient number of placement and

9 other resources of sufficient quality and variety to meet the

10 needs of children and families as specified in the individual

11 case plan in Sec. 6a of this Act. Nothing in this Sec. shall be

12 construed to create a private right of action or a judicially

13 enforceable claim on the part of any individual or agency.

14 If the Department contracts with a private child welfare

15 agency to provide child welfare services or to provide the

16 arrangement of child welfare services, then the private child

17 welfare agency and its employees shall not, as a result of

18 their acts or omissions, be liable for civil damages, unless

19 the acts or omissions constitute willful and wanton misconduct.

20 (Source: P.A. 88-614, eff. 9-7-94.)