Managing Education Risk Exposures Coverage Challenges Risk Control

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Managing Education Risk: Exposures, Coverage Challenges, Risk Control and Risk Management Opportunities Society of

Managing Education Risk: Exposures, Coverage Challenges, Risk Control and Risk Management Opportunities Society of Risk Management Consultants Spring 2011 Conference Robert Bambino WRM America Indemnity Company

What We’ll Cover 1. 2. 3. 4. Educational Risk Exposures Coverage Issues Risk Control

What We’ll Cover 1. 2. 3. 4. Educational Risk Exposures Coverage Issues Risk Control Consulting Opportunities

1. Educational Risk Exposures o Common vs. Special - Property - Liability - Fleet

1. Educational Risk Exposures o Common vs. Special - Property - Liability - Fleet - Educators’ Legal Liability o Mirrors Societal Issues

Exposures – Historic Time Line June 1998 Farragher Ellerth Cases 2000 77% of Instructional

Exposures – Historic Time Line June 1998 Farragher Ellerth Cases 2000 77% of Instructional Rooms have Internet Access 1994 The Highest Serious Student Violence Rate Columbine April 1999 September 11, 2001 2009 Facebook Most Used April 2007 Social Networking Service Virginia Tech 2004 i. Safe Study Regarding 2009 H 1 N 1 Outbreak Cyber Bullying 2011 Loss of state 2003 – Ryan subsidies Halligan Suicide

Leading Loss Drivers – Percentage of all Claims

Leading Loss Drivers – Percentage of all Claims

Loss Drivers by Coverage Line Property Frequency Severity GL Auto ELL IM Water Damage,

Loss Drivers by Coverage Line Property Frequency Severity GL Auto ELL IM Water Damage, Vandalism, MM Premises, Intersection Operations Accidents Sports Assaults EL, Special Education Theft, Vandalism Fire, Collapse Same

Reputation Risk Most Damaging Cases o o o Teacher/ Student sexual assaults Student/ Student

Reputation Risk Most Damaging Cases o o o Teacher/ Student sexual assaults Student/ Student sexual assaults Hazing Bullying/ Cyber Bullying Systemic Discrimination/Harassment

Special Exposures o o Assaults (not sexual assaults) Bus fleet loss experience is favorable

Special Exposures o o Assaults (not sexual assaults) Bus fleet loss experience is favorable EL still a loss leader Cyber bullying is evolving

2. Coverage Issues o o o Still somewhat soft Reduction in services Market segmented

2. Coverage Issues o o o Still somewhat soft Reduction in services Market segmented by size/type Role for consultants Pools and other alternative vehicles play a major role

Coverage Issues Property o Asbestos removal in ordinance or law, following a covered loss

Coverage Issues Property o Asbestos removal in ordinance or law, following a covered loss o Business income limit = actual loss sustained; no time deductibles o No loss limits per location o If no Agreed Amount, TIVs must be accurate

Coverage Issues General Liability o Amend standard “Insured” definition to include employed/voluntary health care

Coverage Issues General Liability o Amend standard “Insured” definition to include employed/voluntary health care professionals o Revision of the watercraft exclusion o Include volunteers as “Insureds” o Worldwide Coverage o Avoid: CG 22 71 – Colleges or Schools o Avoid: CG 00 02 10 01 – 2001 Edition of the CGL (Personal Injury – exclusions “j” and “k”

Coverage Issues General Liability o Sexual abuse/misconduct o Innocent party defense coverage o Adverse

Coverage Issues General Liability o Sexual abuse/misconduct o Innocent party defense coverage o Adverse event coverage

Coverage Issues Educators Legal Liability o Include broad EL coverage o Deductible to apply

Coverage Issues Educators Legal Liability o Include broad EL coverage o Deductible to apply only when an indemnity payment is made o Umbrella/Excess cover EL o Include coverage for breach of employment contract o Include non-monetary defense limit

Other Coverage Issues – Educational Risk o Uninsured Exposures o Poor use of retentions

Other Coverage Issues – Educational Risk o Uninsured Exposures o Poor use of retentions & deductibles - Cost benefit analysis for SIRs - Large deductibles for EDP o Underfunded pools and programs o Low building values - Median construction cost per Sq. Ft. +100% since 1995

3. Risk Control o Risk control, not loss control! o In-house safety and risk

3. Risk Control o Risk control, not loss control! o In-house safety and risk managers are at risk o Support through local/state/national organizations o Challenge is for frank, knowledgeable answers and solutions

Risk Control – Leading Loss Drivers Property GL Fire suppression systems, storage, alarms, breached

Risk Control – Leading Loss Drivers Property GL Fire suppression systems, storage, alarms, breached fire stops, extension cords, overloaded circuits, building security Training for coaches, maintenance, school violence prevention programs, student instruction, playground inspections

Risk Control: Student Violence o Security Audit - Physical inspection and review of past

Risk Control: Student Violence o Security Audit - Physical inspection and review of past incidents o o Policy Review Training Programs Compliance with State Mandates Relationship with Law Enforcement

Risk Control – Leading Loss Drivers Auto Inland Marine Required driver training, DMV checks,

Risk Control – Leading Loss Drivers Auto Inland Marine Required driver training, DMV checks, MV maintenance, storage, DOT inspections Security – laptops, PCs maintenance equipment

Risk Control – Leading Loss Drivers Educators Liability EL policies and procedures, complaint handling

Risk Control – Leading Loss Drivers Educators Liability EL policies and procedures, complaint handling procedures, staff and supervisor training

Risk Control – EL “Organizational” Approach Complaint Handling Polices No Tolerance Environment Follow-Up Training

Risk Control – EL “Organizational” Approach Complaint Handling Polices No Tolerance Environment Follow-Up Training Awareness

Risk Control – Special Exposures o Cyber bullying o Student travel o Reputation risk

Risk Control – Special Exposures o Cyber bullying o Student travel o Reputation risk - Develop a crisis response plan - Spokesperson for media - Training - Security at the time-of-crisis

Risk Transfers o Contractors o Professional consultants o Facility users

Risk Transfers o Contractors o Professional consultants o Facility users

4. Consulting Opportunities Many! …but don’t steal my clients! o Coverage analysis o Creation

4. Consulting Opportunities Many! …but don’t steal my clients! o Coverage analysis o Creation of RFPs/ Bid Specs o Risk assessments o On-going risk management relationship - Coverage issues - Risk control - Contract reviews o Claims management/analysis

Consulting Opportunities o Creation of alternative market vehicles o Public sector pools o Feasibility

Consulting Opportunities o Creation of alternative market vehicles o Public sector pools o Feasibility of self-insurance studies