More than just business

Insuring child welfare organizations offers opportunities, rewards and good business

After spending most of her childhood and adolescent years growing up in foster care agencies, Rhonda Sciortino, a California independent insurance agent, felt she had to give back in the best way she knew how. In 1989, Sciortino founded Rancho Cucamonga, Calif.-based Child Welfare Insurance Services (CWI), out of her desire to work with and insure homes and services for abused children.

Sciortino says that child welfare agencies poses some significant insurance differences than other types of nonprofits; even other types of social service organizations. “It may not seem on the surface to be that big of a difference but it is … it’s huge,” she said.

The bricks and mortar of a child welfare agency’s insurance program may be the same — property, auto, liability and workers’ compensation — but the kinds of claims that child welfare providers face calls for a specialist or at least an insurance partner knowledgeable on the right kinds of defenses.

“The defenses that must be raised to properly see the case through to a successful conclusion are very different from other non profits and other social service organizations,” Sciortino said.

For example, Sciortino cited a claim seen all too often in her career. An adolescent girl in foster care develops an inappropriate relationship with a male staff. “I’ve seen insurance companies pay out huge settlements and I’ve actually seen that scenario go to trial to policy limits and beyond with the allegation by the adolescent or guardian/parent for negligent supervision,” she said. But in cases where an organization has done all it can, including properly screening and training its employees as well as following all area regulations, a proper defense can be made,” she said.

“If the employee commits a criminal act, which is what that is, then the employer really cannot be held vicariously liable for the criminal acts of the employee any more so than an insurance agency should be held liable for one of their producers robbing a bank during work hours,” she said. “I’ve seen the exact same scenario where the right defense counsel raises the proper defenses and the case was thrown out,” she said.

Part of what drives Sciortino to serve the specialty niche of child welfare providers is their unique need for help when faced with such claims.

“We know that claims are going to happen; it’s not if they are going to happen but when,” she said. While claims hurt any insured, personal or commercial, they can be devastating for a child welfare agency, Sciortino says. But claims in particular can be devastating to the insurers covering child welfare agencies, she adds. Even if the carrier is financially strong, if it has little or no experience in defending child welfare agencies the results can be catastrophic, she said.

Risk management is key
Good risk management is vital for any business, but for child welfare agencies, risk management literally saves lives, Sciortino says.

“It can make an experience for a child be tolerable as opposed to just being a nightmare,” she said. That’s not to say that people running child welfare agencies are not committed to providing a safe environment for their residents, but the role that local broker can play in risk management is extremely important, she added.

“The local insurance broker can go in there and say, ‘Here’s what we know about claims that have been studied over the years on how to keep kids and staff safe,'” she said. “Staff turn over is very high and so if we can give them low or no cost ways to prevent injuries to staff and kids we can help with that turnover problem and keep kids safe and improve their experience in foster care.”

In general, Sciortino says that the majority the insurance brokers she has seen only insure one or two child welfare organizations, but there is plenty of opportunity for agents.

“There’s tremendous opportunity because of the fact that there are lots of children’s agencies out there,” she said. “I’ve spoken to a lot of people that don’t even know who their broker is. They are with the same broker for over 20 years because of some relationship back then. But here we are 20 years later and it’s the same CSR that sort of just processes the renewal … there’s just no active involvement.”

More than just business
“Insurance has been extremely good for me,” Sciortino confessed. It was the key that unlocked the door to her independence.

At just 15 years old, Scirotino appealed to a judge to emancipate from protective services. “I wanted to be on my own,” she said. The judge told her she needed a job, a place to live, money in the bank, and a car. So she took a job as a telemarketer for a small Farmers insurance agency. “I started in insurance with a work permit when I was 15 and I loved it,” she said. Not very long after that she appealed to California’s insurance commissioner to allow her to take the insurance agent’s licensing exam because she “thought it was terribly unfair that the (sales) producers drove Porches” while she still drove a beat-up ’66 Volkswagon. She was allowed take the exam and received her license to sell insurance in 1978 at age 17.

Sciortino founded CWI”to protect group homes, foster family agencies, nonpublic schools, outpatient services, all with a purpose of caring for kids.” CWI now has two insurance programs: one through Tudor Insurance Co., a wholly-owned subsidiary of Western World; and its newest program, launched in 2007, through Markel Insurance Co.

Working with children’s homes has been tremendously rewarding, she says, and can be rewarding for any insurance agent or broker.

“Take what you know about risk management and apply it to people who are helping abused children,” Sciortino said. “It is the most rewarding work, I think, that you can possibly do in insurance.”