Understand the coverages available in the various education sectors
With the new administration in place, the future of America’s education sector is a mystery, like the reasoning behind Common Core math. Regardless of what the future holds, the need for insurance will remain in the education arena. But before walking into a school and saying, “Hey, let me offer you some coverage,” it’s best to know what you’re doing.
“It’s important for agents to pay close attention to and understand the differences among types of institutions,” says Joe Carter, vice president of business development and marketing for United Educators. “They all have education in common and are mission aligned, but campus operations can be very different from one to the other.”
“There’s higher education—colleges and universities, which include four-year institutions, community colleges, and two-year colleges. Some have dorms whereas others do not,” explains Mark McCrary, president of Glatfelter Public Practice at Glatfelter Insurance Group. “There are also K-12 public school districts, pre-K-12 private schools, including college prep, private schools affiliated with religious denominations, and charter schools that are specific to certain grades or activities.”
“Charter schools is probably one of the fastest growing areas we’re seeing in the education sector,” says Andrew Graham, managing director of risk management services for Wright Risk Management. “Some people are frustrated with their current public school education districts and there’s not as much red tape with charter schools, so they can specialize a little more. The government seems to be pushing things that way as well.”
Adds Carter: “With the new administration, I think we’re going to see a dynamic environment over the next couple of years. Federal funds might be shifted to increase enrollment at charter schools and private schools; the new education secretary has demonstrated a strong interest in seeing those types of institutions grow and flourish.”
Know the coverages
Like knowing the differences among the educational sectors, it’s just as imperative to be aware of the plethora of coverages available for the variety of activities and incidents that can occur on their campuses.
“A big one is abuse and molestation,” says Kevin Beer, president of Wright Specialty Insurance. “It’s important for agents and brokers to understand how their carriers treat that coverage. In addition to the primary policy, is it covered in the excess policy? I think we’ve come a long way, and incidents get reported a lot sooner than they did in the past; however, they still happen.”
“For sexual assault matters, there could be a situation where a student reports being assaulted by another student,” says Carter. “In that case the institution will have to take measures to investigate; some insurance carriers may restrict coverage for the institution’s investigation process when it’s just a report and not a lawsuit.
“There is also the possibility that a university could discover a sexual misconduct issue that wasn’t known for a number of years. You should ask your carrier how coverage plays out for an institution if something is reported many years after an incident allegedly occurred.”
As technology advances, another coverage that’s becoming a staple is cyber liability. “Everyone should have cyber liability and first-party coverage for credit monitoring, as well as third-party coverage for any damages that occur because of the cyber event,” McCrary says.
“We’ve seen a few lawsuits where a school received an email from an address that looked like it was from their bank, the government, or another employee who instructed them to make a deposit or do a wire transfer, and the address actually belonged to a thief,” Graham explains. “The school made the transfer, and it’s not covered under a standard crime policy or even some cyber policies.”
Speaking of technology, who hasn’t flown a drone yet? “We’re seeing more drones in the public K-12 schools and the higher education institutions,” says Graham. “They’re teaching students how to use them; they’re designing and building them.”
“The risks of using drones for educational and commercial purposes shouldn’t be underestimated,” Carter says. “You’ll see more of this going forward, and agents should be aware of coverages. Schools may want to film the campus from above for fundraising purposes or to attract prospective students. The school should know its coverage details in advance, in case something goes wrong in the process.”
If the school sponsors contact sports, there’s a risk of concussion and other injuries. “Concussion and head injury is an emerging exposure, and it’s important that agents and brokers understand how their carriers respond,” Beer says. “We are starting to see some carriers sub-limit, limit, or exclude that coverage.”
When it comes to educators’ legal liability coverage, “it’s a little different than your typical management liability policy or employment practices policy, because of unique factors on the public side of K-12, such as individual education plans and special education, that aren’t covered in the standard management liability policy,” says Beer.
“Institutions won’t need to address every exposure, but they’ll all need liability coverage at some level. Some don’t have athletics, for example. And drones aren’t used at every school,” Carter says. “However, when bad acts happen, both the school and its agent can quickly find themselves in a challenging position with the local community. It’s important for the agent to think hard about all the risks present at the institution to ensure the appropriate coverage, especially for any unique risks the school has.”
Unfortunately, another coverage that’s becoming more prevalent is that for violent events and active shooters.
“If your clients don’t already have violent events coverage in their policies, you should recommend it,” McCrary says. “Our coverage is called school-violent events coverage. We cover business income loss that the school sustains due to a violent event. We also cover extra expenses that the school incurs to get back into operation sooner. Additional coverages include first aid, emergency care, dental services, surgery, hospitalization, x-rays, nursing care, funeral expenses, and prosthetic devices.”
Other components of Glatfelter’s coverage are the services of an independent public relations agency to manage communications after an incident, and transportation costs if the school needs to evacuate people to a hospital or shelter.
“The coverage is not just for teachers and students,” McCrary says. “It covers affected parties who were there when the violent event takes place. This includes sponsored exchange program students, guardians, full-time and part-time employees, substitute teachers, guest speakers, volunteers, and family members who are visiting the institution.”
The school-violent events coverage is valid for 60 days after the violent event or until the school can reopen at a functional level.
“It’s an important coverage to have, especially today,” McCrary says. “You don’t know where the next event is going to happen. I read an article that discussed the number of violent events that occur in the United States each year, and it was mind-numbing. Most of them we don’t even hear about.”
On the risk management side, it’s important to have a structured system for assistance.
“We work with our policyholders to make sure they have plans in place, whether it be the police reaching out to the school districts and working with them in response to an event, or us working with the school district to reach out to the local police to coordinate a response plan,” says Bill Raab, director of risk control for Glatfelter Public Practice. “We will work with them from a baseline level to put together an emergency response committee to start doing training within the district. They run vulnerability assessments at the schools to see how hard it would be for someone to break into the building during school hours, or run different drills for different situations, such as whether you’d have to lock down the school, evacuate for a bomb threat, or deal with someone in the neighborhood who may have robbed a bank.
“Make sure everyone is on the same page; otherwise you’ll end up with chaos,” Raab advises. “Coordination of the different players who will be responding—whether it be police, fire, or EMS—is one of the most important things that need to be done.”
Along with developing a plan, just as important is consistent training. “After we get a plan in place, we practice it, which includes involvement from local law enforcement and emergency services and district leadership,” says Raab. “It’s easier to practice when your heartbeat is at a normal pace. When the actual event is going on, everyone is in a panic, so it’s much more difficult to react. School leaders need to practice regularly.
“Regular training is important, because changes take place in faculty and leadership,” Raab continues. “Students come and go. Many states have regulations about when and how drills are to be conducted. The regulations differ from state to state, so there’s no national standard.”
While your clients are maintaining a training schedule, remind them to keep their students’ parents informed. “Some schools have meetings with the parents so they know what the school is doing to protect their children,” Raab says. “They’re not easy conversations to have; it’s not like discussing a fun field trip. These are real issues that are difficult to discuss, and some community members prefer not to talk about them.”
Advice for agents
“The current marketplace for educational institutions is active; a number of providers are in the space, and new ones are joining,” McCrary says. “The most important thing agents can do is be aware and look around. Every area in the country has schools. Talk to the people in the area. There are people on the school board or who used to be on the school board. Maybe someone you know attended a private school in the area or has a child who attends. Typically what we see countrywide is that school business
is written by a local agent.”
“The most credible way to approach educational institutions is to come in with knowledge of what they care about,” says Carter. “Get involved with trade associations that the institutions belong to. Attend the local, regional and national conferences with school business officers and risk management and safety team members. This will put you in a great position to approach the school; and, more important, if you learn from the conferences, you’ll be better prepared to find solutions that bring the greatest value to the client.
“Cheap coverage for an institution should always be a red flag,” Carter continues. “A good agent should know what is included in the policy. For example, does the carrier provide training for key issues in the educational environment, such as workplace harassment, bus safety, or athletic management? How will the carrier respond if a crisis arises and becomes public? Will the underwriters be available to discuss coverage for potential changes at the institution? These are all questions the agent should consider when selecting coverage.”
And now, having read this article, you’re one step closer to your successful career in the education sector. You get an A for effort.
By Christopher W. Cook
For more information:
Glatfelter Public Practice
Wright Risk Management