Insurance Crisis Threatens Illinois Foster Care System
Illinois is facing a potential crisis within its already strained foster care system. The crux of the issue? A critical shortage of liability insurance for the private agencies that care for the majority of the state’s foster children.
House Joint Resolution 24, recently introduced, aims to establish the Child Welfare Agency Liability Task Force. This task force has been charged with finding a long-term solution to the insurance problem affecting Illinois’ child welfare system. Without a resolution, hundreds, possibly thousands, of foster youth may be displaced as agencies lose the insurance coverage required for them to operate.
The stakes are high. Nearly 70% of Illinois’ more than 18,000 foster children are under the care of community-based, not-for-profit agencies operating under state contracts. These organizations must maintain liability insurance to continue to provide services to children, but the market for such insurance has all but vanished.
The resolution states that the remaining insurers plan to stop writing new policies in 2025. They are only selectively renewing existing ones, often at high rates and with significantly reduced coverage. This has resulted in agencies preparing to scale back operations or close entirely.
Without a safety net in place, the Illinois Department of Children and Family Services (DCFS) may have to take direct supervision of the displaced children. However, insiders warn that DCFS is neither equipped nor budgeted to handle the influx. Moreover, with so many agencies facing insurance barriers, the options to transition children to other providers are quickly diminishing. The ripple effects are severe: longer placements, loss of foster families, and deeper strain on an already burdened system.
A Growing National Trend
This crisis mirrors a larger national trend, according to advocates. California is dealing with its own insurance challenges this summer, with several private foster care agencies expected to lose their coverage. Sources report that this situation “is kind of cascading across the country.”
Two bills introduced previously this year, House Bill 3138 and Senate Bill 1696, proposed a short-term solution: offering two-year civil liability immunity for foster care agencies and their employees unless their actions were proven as “willful and wanton”. However, these proposals stalled because of opposition from the Illinois Trial Lawyers Association. The Association argues that such immunity would deny justice to children who have been abused.
Jim Collins, executive director of the Association, said, “Foster youth in care are among the most vulnerable within our communities. Proposals that reduce or erode access to justice for youth victims are as misguided as they are unjust.”
Seeking Solutions
With the proposed legislation stalled, lawmakers created a task force to involve all stakeholders, including the Department of Insurance, DCFS, insurers, legal advocates, and child welfare organizations. The group is expected to begin meeting soon and must deliver a final report by December 2026.
Andrea Durbin, CEO of the Illinois Collaboration on Youth, supports such cross-sector discussions. She said, “People are trying to come together, at least, to figure out what can we do in the short run and what can we do in the long run.”
One idea being discussed is shifting liability for private foster care agencies to the Illinois Court of Claims, where damages are capped at $2 million. However, this has met resistance from the state’s attorney general’s office, due to staffing constraints, which advocates reject.
Rep. Suzanne Ness, D-Crystal Lake, the House sponsor of the liability immunity bill, said: “This isn’t just a DCFS problem, it’s also an insurance problem. And if we don’t figure it out, these kids are going to be disrupted again.”
Whether Illinois can avoid further disruption depends on the newly formed task force and the ability of lawmakers, insurers, and advocates to find common ground quickly in a high-stakes policy battle concerning vulnerable children.
