When is it Safe for Your Association to Help a Parent Find Child Care?

As a family child care provider you want to fill any openings in your program as soon as possible.

This means you want as many parent referrals as you can get from your local Child Care Resource and Referral Agency.

These agencies offer a wide variety of programs and services for providers and parents, including a data base of family child care providers, child care centers, and other child care programs to help parents looking for care.

Not satisfied with relying on these agencies to handle parent referrals, some local family child care associations have established their own provider referral services. They pass out lists of their members to parents who call looking for child care.

Such a service is a benefit to their members and may be particularly helpful during tough financial times.

But if your association is giving out names of local providers there are some risks that come with this activity.

If the parent enrolls her child with the referred provider there is the chance that the child may be injured while with the new provider. If this happens, the parent may sue the association who gave her the referral. This is more likely to happen if the chosen provider does not carry business liability insurance. The risk of a lawsuit may be small but the consequences could be large since, at a minimum, the association being sued would probably have to hire a lawyer to defend itself.

Referral vs. RecommendationThe reason that a parent might sue the referring association is because the parent may believe that she has been given a recommendation rather than a referral.

There is a significant difference between the two.

A referral is the passing on of information about other family child care providers where the clear responsibility of the decision over which provider to choose is transferred to the parent. A recommendation is an attempt by the association passing on information to influence the parent’s decision thus retaining some of the responsibility for the decision.

A recommendation carries with it a high risk of liability while a referral does not.

A referral includes passing out the name of more than one provider while not making any qualitative comments about the other providers: “Here are the names of four providers who live in my area who you may want to contact in your search for child care.” A recommendation sounds like this: “Here’s the name of a family child care provider, Sally Jones, who I know has a high quality program. She will be great for your child.”

If your association is passing out names of other providers to parents, it may not always be making a clear distinction between a referral and a recommendation. Failure to do so can raise the risks of a lawsuit. Here’s how to reduce such risks:

Always give out at least two names of other providers, never just one. Giving out only one name implies your association is giving a recommendation.

Give parents a written disclaimer about the names given to them that explicitly states that they are not getting a recommendation. Here’s the disclaimer given out by the Minnesota Child Care Resource and Referral Network:

“The Minnesota Child Care Resource & Referral Network makes child care referrals, notrecommendations. We cannot guarantee the information concerning any providers in our files. We strongly urge parents to interview and check references carefully before leaving a child with a care provider. We do not license, endorse or recommend any particular provider, nor can we assure you that any provider gives quality care.”

Try to be as current as possible with the information being passing on. If your association gives out names of providers who have lost their license you are increasing the risk that the parent may sue when they find this out after their child is injured.

Don’t ask other providers about the rates they charge parents. It is illegal for child care competitors to discuss rates with each other. This is called price fixing (an anti-trust violation).An association should not survey its own members about their rates unless this rate information is publicized widely.

Get the proper liability insurance to protect your association in case it is sued.

Insurance

Sometimes individual child care providers give out referrals to parents. If you do this you are taking on an additional risk because of the possibility of a parent lawsuit when a child is injured.

Your existing professional business liability insurance policy will probably not protect you in this situation. If you are involved in giving out referrals you should talk to your insurance agent about what you are doing so you can purchase the proper insurance to protect yourself.

If you belong to an association that gives out referrals you should talk to your association officers about the association purchasing adequate insurance to protect it from lawsuits.

Although the risk of a successful lawsuit against an individual provider or an association is very small, the bigger risk is being forced to pay a lawyer to defend yourself or your association from the lawsuit.Even if you win your case you must still pay the lawyer and that can be very expensive. If a child is injured and the provider involved does not have business liability insurance, the parent may be looking to sue your association.

Your association should purchase “general liability insurance” to pay for legal defense. It will also cover the risks of injury to providers, parents, and children during an association function – meetings in churches or schools; a house tour of members’ homes; a conference; or a resource table at a local fair.

In addition, your association should purchase “directors and officers insurance” to protect the organization from bad decisions made by the directors, fraud, financial mishandling of association funds, and negligence by the directors.

It’s always a good idea to talk to your insurance agent about everything your association does to make sure you are covered. The combined cost of both types of insurance will probably be around $500 a year.

If you or your association is not properly covered by insurance you should stop offering referrals to other providers. Instead, tell parents to contact the local Child Care Resource and Referral agency that also offers parents written and counseling help on how to find a quality provider as well as referrals to other parent support organizations, and other community resources.

If your association has concerns or complaints about how your local Child Care Resource and Referral agency is offering assistance to parents or how they are making referrals, talk with them. Don’t assume that they won’t listen. There are many ways the referral agency can help your local association be more successful.

Thanks to Debe Marofsky of Affiliated Insurance, Inc. for her help with this article.

Tom Copeland - www.tomcopelandblog.com

Image credit: https://handinhand.csp.edu/