California’s Liability Insurance Crisis Grows

On September 30, the Nonprofit Insurance Alliance of California (NIAC) notified several California nonprofit foster family agencies (including VFA members) that they would be losing liability insurance once their current policies end. The decision came about a year after a jury awarded $24.8 million to three siblings who were sexually abused in a foster home certified by a Northern California foster family agency. Since then, NIAC, which previously insured 90 percent of the state’s family agencies, has worked to enact legislation in California that would limit liability for such agencies for harm to foster children caused by factors outside their direct control. After the legislation stalled, however, NIAC sent notifications to the state’s family agencies informing them of lost insurance coverage. An estimated 9,000 youth out of the state’s total 41,000 foster youth live with families overseen by the agencies. Once the insurance expires, the children are likely to be managed directly by the counties or other nonprofits in the state that are still insured.