SENATE BILL REPORT

                   SB 5708

              As Reported By Senate Committee On:

        Human Services & Corrections, January 29, 1998

Title:  An act relating to liability insurance for child day‑care providers.

Brief Description:  Requiring liability insurance for child day‑care providers.

Sponsors:  Senators Kohl, Long, Hargrove, Prentice, Brown and Winsley.

Brief History:

Committee Activity:  Human Services & Corrections:  2/19/97, 2/26/97 [DPS]; 1/22/98, 1/29/98 [DPS-WM].

SENATE COMMITTEE ON HUMAN SERVICES & CORRECTIONS

Majority Report:  That Second Substitute Senate Bill No. 5708 be substituted therefor, and the second substitute bill do pass.

  Signed by Senators Long, Chair; Zarelli, Vice Chair; Franklin, Hargrove, Kohl, Schow and Stevens.

Staff:  Joan K. Mell (786-7447)

Background:  Presently, day-care centers and family day-care providers are not compelled to carry coverage for injury or harm that occurs on their premises.   In the past, providers have had  a difficult time obtaining affordable coverage for the liability issues that arise in day cares.  In fact, this difficulty was addressed in earlier legislation that resulted in a statute that compels liability carriers to write coverage specific to day cares.

Facilities other than day cares are required to carry liability coverage, which fosters the public perception or misperception that day cares are covered.  California has recently enacted statutory provisions similar to those set forth in this bill.

Summary of Second Substitute Bill:  Licensed child day-care centers and family day-care providers are required to have day-care insurance as defined by the insurance statutes.  Policy limits are a minimum of $100,000 per occurrence.  Family day-care providers can opt out of the coverage requirement by maintaining a file of affidavits or declarations disclosing to parents the day care=s lack of insurance coverage.  The requirements of the statute are not to be used for argument purposes in personal injury cases.

Second Substitute Compared to Substitute Bill:  The second substitute requires purchase of Aday-care insurance@ as defined by statute, rather than liability insurance for occurances resulting in bodily injury or property damage. 

The second substitute adds family day-care providers to the requirement, but gives them an opt out provision if they have signed declarations from parents documenting notice to parents that the day care is uninsured.

Substitute Bill Compared to Original Bill:  Requirements that insurance companies notify the state of policy terminations are removed.  It is clarified that self insurance is acceptable when authorized under state law.

Appropriation:  None.

Fiscal Note:  Not requested.

Effective Date:  The bill takes effect on January 1, 1998.

Testimony For:  Many day-care centers are not insured.  Insurance is affordable in the current market.  Children will be better protected. 

The public is generally uninformed about the lack of insurance coverage within day-care facilities.  Mandating coverage is consistent with minimum requirements often imposed upon a variety of different businesses.  The declaration and affidavit notice to parents regarding the lack of coverage keeps the parent properly informed.  Concern was expressed about availability of affordable day-care coverage for all of the issues that concern day-care facilities.

Testimony Against:  There is concern that insurance companies would have additional administrative costs and could have liability exposure if reports are not made.

Testified:  Lonnie Johns-Brown, WAEYC; Don Morgan, Morgan & Associates Insurance Brokerage (pro); Jean Leonard, State Farm (con); Rene Jankiewicz, Michelle Hunt, Lorri Buxton, Washington Parents for Safe Daycare (pro).