SB3824 104TH GENERAL ASSEMBLY

LRB104 19379 BAB 32827 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3824

Introduced 2/6/2026, by Sen. Ram Villivalam

SYNOPSIS AS INTRODUCED:

New Act

Creates the Liability Insurance for Day Care Providers Act. Provides that the Department of Insurance and the Department of Early Childhood, in consultation with community partners, shall conduct a survey that shall include, but not be limited to, specified subjects concerning the accessibility of liability insurance for day care providers. Requires the Department of Insurance and Department of Early Childhood to develop a finalized report of the survey and submit the findings of the report to the relevant community partners, the General Assembly, and the Governor no later than one year after the effective date of the Act. Effective immediately.

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Liability Insurance for Day Care Providers Act.

Section 5. Findings; purpose.

(a) The General Assembly finds that:

(1) There is an ongoing concern regarding the availability and affordability of liability insurance for day care providers within the State of Illinois.

(2) In Illinois, day care providers operate tight margins within a fragile economic model in which the overall revenue fails to offset operating expenses, an issue predating the pandemic but now exacerbated by rising costs, low subsidy reimbursement rates, staffing shortages, and current economic limits on a parent's ability to pay for the cost of day care. In addition, revenue barely covers rising operating costs, including salaries for staff, building maintenance, utilities, insurance, licensing costs, supplies, food, and other expenses, which make it difficult for many day care providers to account for unexpected increases in operating costs. Day care owners often struggle to provide health insurance and retirement benefits for staff and report growing challenges in accessing and affording required liability insurance coverage for their licensed programs.

(3) Liability insurance protects day care providers from unforeseen financial risks due to accidents, and inadequate liability insurance coverage can have harsh financial, regulatory, and legal repercussions for providers. Premiums for liability insurance, a necessary and mandatory requirement under State licensing for day care programs, have risen exponentially in recent years, significantly increasing the cost of operating day care programs across the United States, including Illinois.

(4) Eighty percent of day care providers, including family day care, rural, urban, and suburban programs have reported rising liability insurance costs over the past year. Among center-based and subsidy-serving programs, most experienced annual increases between $2,000 and more than $10,000, further straining the day care system in Illinois. In addition to rising liability insurance premiums, day care providers increasingly face challenges when they are unable to secure adequate coverage or, in some cases, any coverage at all.

(b) The purpose of this Act is to address the ongoing crisis of rising liability insurance premiums and the growing inability of day care providers in Illinois to obtain adequate, affordable, or sufficient coverage, with particular focus on identifying and responding to the regulatory barriers affecting day care providers and insurance premiums and coverage.

Section 10. Survey to study liability insurance premiums for day care programs; report.

(a) The Department of Insurance and the Department of Early Childhood, in consultation with community partners, including licensed day care providers and insurance providers, shall conduct a survey that shall include, but not be limited to, the following subjects:

(1) the availability and affordability of liability insurance for day care owners;

(2) an assessment of the breadth and scope of the financial impact of rising liability insurance premiums on day care programs;

(3) an assessment of the reasons for increasing liability insurance coverage;

(4) descriptions of claims for liability insurance in general;

(5) barriers to obtaining liability insurance as a requirement of day care licensing;

(6) types of insurance coverage available to child care providers offered in Illinois and other states;

(7) insurance premium and coverage changes in other industries;

(8) causes of the increasing difficulty in maintaining liability insurance coverage; and

(9) an examination of applicable policy solutions related to increasing liability insurance in other states.

(b) The Department of Insurance and Department of Early Childhood shall develop a finalized report of the survey and submit the findings of the report to the relevant community partners, the General Assembly, and the Governor no later than one year after the effective date of this Act.

Section 15. Repeal. This Act is repealed on January 1, 2028.

Section 99. Effective date. This Act takes effect upon becoming law.