What are the liability insurance requirements for a Texas child-placing agency?

• A. Maintain liability insurance coverage in the amount of $300,000 per occurrence
• B. Maintain liability insurance of $1,000,000 per occurrence
• C. No liability insurance required
• D. Liability insurance only for foster homes

Answer: (A)

Liability insurance protects the agency from financial risk when someone is harmed or property is damaged during agency operations. In Texas, licensed child-placing agencies are required to carry liability coverage with a per-occurrence limit of $300,000. Per occurrence means that for each individual incident or claim, up to $300,000 is available to cover defense costs, settlements, or judgments, rather than spreading a single incident across a yearly aggregate. This minimum helps ensure there are funds to handle a typical claim without jeopardizing the agency’s resources. Higher limits, such as $1,000,000 per occurrence, may be chosen for extra protection, but they exceed the required minimum. Insurance limited only to foster homes wouldn’t cover the full scope of agency operations, and having no liability insurance at all would not meet licensing requirements.