Oklahoma House Panel Votes to Close Daycare Insurance Loophole

An Oklahoma House of Representatives committee has voted to close a loophole in state law, ensuring that all daycare facilities have liability insurance.

House Bill 1848, by state Rep. Mike Shelton, eliminates an exemption that allowed home-based daycare facilities to operate without liability insurance.

“When I first carried legislation to require day cares to have liability insurance, there was some concern that the cost might be more than a small, home-based daycare could afford,” said Shelton, D-Oklahoma City. “However, we have since learned that the insurance can be purchased for as low as $4.50 per child per year. It just makes sense to have an insurance policy that provides protection for the daycare operator, the children at the facility and their families.”

Under the legislation, if a daycare center cannot obtain insurance, the Department of Human Services would be able to provide an alternative certification for the facility that would alert parents that it does not have coverage.

In 2008, Shelton authored “Demarion’s Law,” a bill requiring day care facilities to carry liability insurance. The legislation was filed after a preschool child, Demarion Pittman, was accidentally left in a hot van and suffered severe injuries that left him unable to walk or talk and his family facing millions of dollars in out-of-pocket expenses.

Although the legislation required day care facilities to carry a minimum of $200,000 in coverage, the law included an exemption, primarily for day cares operated out of a home. Under the law, those facilities are required to notify parents of the lack of coverage.

During a legislative study last year, officials told legislators that just 36 percent of the 1,597 home-based day cares in Oklahoma currently carry liability insurance, compared to 92 percent of larger daycare centers.

With the low cost of liability insurance and the significant potential exposure facing daycare centers, Shelton said it only makes sense to require coverage at all facilities. He noted that Demarion Pittman’s medical expenses totaled more than $2.5 million in a year and a half.

“I believe carrying insurance benefits everyone involved — the daycare operator, the families, and most of all the children,” Shelton said. “It is time to require that all daycare operators carry insurance, and I appreciate the committee’s support for this important bill.”

House Bill 1848 passed out of the House Human Services Committee on a 9-1 vote.

Source: Oklahoma House of Representatives