Over 11 million K-12 students were enrolled in private schools in the US in 2018, and that number is only expected to grow.
Private and charter schools allow students to experience elite academics, arts, and technical training that public schools cannot provide, which might be why 59% of Americans agree that private & charter schools usually provide a better education than public schools. While this may or may not be the case, I am not here to debate whether public or private education is better for children, but instead, I want to point out that the risks and challenges associated with schools, no matter what type, go beyond those that a typical business faces, which makes the need for specialty insurances that much more important for schools.
General Liability will help protect your school from claims of bodily injury or property damage. This insurance also helps cover certain claims of slander and libel including the school’s legal fees and settlement money in case of a lawsuit. Although general liability coverage can help pay your student’s medical bills if they get hurt at school, many schools seek to comply with state educational code requirements and limit their general liability exposure by providing Student Accident insurance to students in kindergarten through 12th grade.
Social Service Professional coverage covers liability for damages arising from errors and omissions in the providing of professional services. Broad coverage applies to nonprofit professionals, including educational professionals, childcare workers, counselors, daycare providers, instructors, mentors, psychologists, social workers, tutors, etc.
High limits of Abuse and Molestation coverage used to be the norm and very attainable. Abuse and molestation coverage is becoming more and more difficult to obtain especially if you are looking for high limits of insurance. This may be one of the more difficult coverages to place currently in the marketplace as insurers are experiencing an uptick in abuse and molestation claims. Insurers are becoming more reserved with the limits they are offering, and some umbrella carriers are not including it on their forms.
Educators Legal Liability is designed to cover a broad range of nonbodily injury/non-property liability claims made against the administrators, employees, and staff members of both schools and colleges. ELL, which is also known as “School board legal liability insurance,” is a hybrid of traditional Directors and Officers (D&O) and Errors and Omissions (E&O) coverages. Typical claims covered by ELL include wrongful termination, wrongful dismissal, failure to grant tenure, and negligent counseling.
Umbrella Insurance is an extension of your general liability policy. Providing your school with additional liability coverage above and beyond your underlying liability policy in the event, your limits get exhausted. An umbrella policy starts anywhere from $1,000,000 limit to several million dollars such as $10,000,000 and in some rare cases $20,000,000 depending on the size of the school. In the event of a large claim having an Umbrella policy with proper limits of insurance based on your exposure can be the difference of the claim being fully covered or not.
Workers Compensation is an obvious coverage that is needed for schools, or any business for that matter, that has employees. The reason I wanted to include this is because it is a policy that can get out of hand quickly and frustrate you the most. Workplace injuries are going to occur, I can guarantee that. Working with an insurance carrier and broker who is proactive on workplace safety can be the difference in saving you thousands and thousands of extra premium dollars. Monitoring your experience modification, reviewing claims that have occurred from at least the past 5 years (maybe even 10), identify trends in those claims such as the same injuries occurring or the same claimant getting hurt. Forming a safety committee can be a benefit as well. I recommend 3-5 people for this committee to meet quarterly and talk about scenarios where someone almost got hurt or talk about an actual injury. Do this with your insurance broker who will help implement policies & procedures and you will see improvement in your claims history which will save you money!
Insurance costs are based on the underlying risk associated within your school. Reducing risk or improving your risk profile can get you the best coverages, limits, terms, and conditions, as well as the best pricing. Working with a risk manager who helps improve your risk profile while lowering your overall cost of risk will result in a safer environment and, in turn, reduces policy costs for your school. Risk profile improvement leads to best-in-class consideration by policy writers.
Many insureds only hear from their broker 90 days before their renewal. It’s critical you work with a broker throughout the year to help improve your risk profile to position you to the underwriter as “best in class.” Here are the steps you should take to improve your risk profile.
- Identify exposures;
- Develop Strategies;
- Implement policies and procedures; and
- Monitor the plan.
As you can see, 90 days is simply not enough time.
Since Covid-19 Schools are now faced with challenges they never thought of. The need to reevaluate risk is critical with so many changes that have occurred in schools around the country in such a short period of time.
Schools of all types are now faced with a potential pandemic exclusion on their liability policy making it problematic if a student contracts Covid-19 at the school and spreads it to someone. They could potentially sue you. Regardless if this can be defended or not, it is an exposure that schools are now facing.
Cyber liability is another problematic area where schools have transitioned to remote learning by using technology platforms like Zoom or Microsoft teams. Teachers and students are now interacting using this technology and there have been many reports of “Zoom bombing” where a zoom meeting gets hacked with inappropriate content. Whether the hacker used racial slurs or inappropriate pictures, there are liability concerns associated with that. Furthermore, with employees working from home, they are more susceptible to phishing schemes and other cybersecurity attacks.
Schools and educational institutions present a unique challenge to finding the right school insurance coverage. Although most if not all schools face the same exposures, not all risk is equal. Management of risk within an organization is equally as essential to a school regardless of the size of the school. Its critical you work with your broker and implement the proper policies and procedures to get the best terms and conditions possible from your insurance carrier.