Alabama’s Child Care System Under Pressure from Rising Liability Insurance Costs

Child-care providers across Alabama are confronting a growing crisis: liability insurance costs are soaring, coverage is shrinking or harder to obtain — and for many, it’s starting to determine whether centers stay open at all.

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For providers in the state’s Wiregrass region — and beyond — the crunch is already painful. “Insurance for my child care business has tripled since 2023, I’m now paying $70,000/year for three centers in the Wiregrass area,” says Kishia Saffold, TAMCC Dothan leader and owner of Kiddie Care Learning Center.

 

Her experience isn’t an isolated one. According to a national survey released in 2024 by NAEYC, liability-insurance challenges have become a major concern for early-childhood and child-care providers across the country — and the consequences are reverberating in communities, including here in Alabama.

 

What the NAEYC Data Show:

• The 2024 survey polled 1,173 early-childhood educators from 49 states and Washington, D.C. — including center-based and home-based programs that carry liability insurance. 

• Among those respondents, roughly 80% reported that their liability-insurance costs increased in the past year.

• In addition to rising premiums, many providers noted growing difficulty securing coverage. According to one policy-brief summarizing the survey, some insurers are pulling out of the child-care market, or offering more restrictive policies (or none at all) to centers — especially those operating multiple locations or larger programs. 

• For many providers, liability insurance is not a luxury — it’s a lifeline. The survey found that majorities believe insurance helps protect both their program and the families they serve, and for many it is a state requirement. 

• The broader consequences: increasing insurance costs is one of several crippling cost pressures child-care providers face. According to a separate 2024 state-level market-rate study for Alabama, many providers cited escalating liability-insurance expenses as a significant challenge. 

 

Why This Matters — for Providers, Families, and Communities:

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1. Providers are at financial risk — and many are already under strain.

Child-care centers, especially small or mid-size operators like those in the Wiregrass area, run on very tight budgets. When insurance premiums triple — as in Ms. Saffold’s case — the added cost may be impossible to absorb without raising tuition, reducing services, or cutting staff.

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Even worse, some insurers have begun shrinking coverage or refusing to renew policies. Without insurance, a center could be forced to close, given the high legal and financial risks that come with operating a care program for children. 

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2. Families may have fewer affordable, quality child-care options.

If centers close or cut capacity, families — especially working parents — may find it harder to secure reliable care. In Alabama, where many families already struggle to afford child care, rising costs for providers can translate quickly into higher tuition.

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That dynamic compounds longer-term structural challenges: as care becomes less accessible or more expensive, communities can face “child-care deserts,” which harms economic stability and child development alike.

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3. The overall stability of Alabama's early-childhood system is threatened.

The 2024 statewide market rate study for Alabama showed that rising costs — including liability insurance — are among the top challenges providers face

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When centers shut down, operate at reduced capacity, or struggle to pay staff, the ripple effects can be broad: fewer enrollment slots, more strain on remaining centers, and increased stress on parents trying to find care — which can influence workforce participation and community economic health.

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What can be done — and what some advocates recommend.

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According to NAEYC and experts studying this problem, a multi-pronged response is needed to avoid a widespread collapse of child-care capacity. 

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• Public investment and subsidies: Increased and sustained public funding — either through grants, subsidies, or insurance-assistance programs — could help centers absorb rising insurance costs so that they don’t have to pass them to families. 

• Insurance system reforms: Options like pooled insurance, reduced-cost reinsurance, or state-facilitated insurance programs could relieve some of the burden on small and mid-size providers. 

• State-level policy actions: Like some states are exploring, Alabama could consider regulatory or legislative steps to ensure access to affordable liability coverage for child-care providers — or at least monitor and study the insurance market for early education providers.

• Community and provider collaboration: Providers, local leaders, parents and advocates working together could help identify pooling or cooperative models — potentially allowing multiple centers or networks to share coverage or costs.

 

Conclusion: A system at risk — but not without hope.

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The story of Alabama’s early-childhood education landscape today is one of deep strain. As federal pandemic-era relief funds have expired and costs rise, providers like Kishia Saffold are facing tough choices: try to absorb skyrocketing insurance premiums, pass those costs on to families, or risk closure.

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Yet as the data from NAEYC shows, this is not just an isolated problem — it is a national pattern, and one that threatens the supply of safe, affordable, quality care for children across the country.

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What happens next depends largely on whether states — including Alabama — and communities step in. Without coordinated action, surging liability-insurance costs may force even more providers to close, shrink, or reduce the quality of care. But with thoughtful investment, reforms, and cooperation, it may be possible to stabilize the system and preserve access to early childhood care for families and communities who need it.

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