The child care industry isn't what it used to be—or what it will be. Coverages have changed and the market has shrunk as a result of the recession. But as the economic recovery gains momentum and employment gradually rebounds, independent agents can successfully grow in this business. The key is to identify coverages, terms and marketing strategies which are likely to appeal to a center in today's environment.

Like most other industries, child care that depends heavily on the two-career family has been adversely affected in recent years by the recession. The high unemployment rate has eliminated the need for families to place young children in child care. Some child care centers have gone out of business while others have seen their enrollment drop. Simultaneously, we have an insurance industry with significant amounts of capital and surplus, equating to lower rates and more coverage. The end result is a classic case of supply and demand. There are more insurance carriers aggressively competing to write the business, while there is less business available to be written.

Back in the 1980s and '90s, child care centers were often written on a non-admitted basis with minimal coverage extensions. Today, the vast majority of business is placed in the admitted market, with broad property extension coverages and in a package that may include owned and non-owned automobile coverages. And, of course, admitted business has the advantage of being protected by the state guaranty fund. The minority of centers still written in the non-admitted market tend to be either very small operations or those with difficult loss history or exposures.