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. Recommendation
The 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, not
recommendations. 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. Here's a list
of insurance companies and agents that cover family child care providers and
associations.
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. See my article "Using CCR&R to Promote Your Program."
Thanks to Debe Marofsky of Affiliated Insurance, Inc. for her help
with this article.
Tom Copeland - www.tomcopelandblog.com
Image credit: www.masskidcare.net