2020 Outlook: Top 10 Risks for Education Institutions

RCM&D’s Education Practice is pleased to continue our annual publication of the “Top 10 Risks for Educational Institutions for 2020.” The insurance and risk landscape for education continues to be very dynamic and this document is not intended to be all encompassing; instead, it is designed to offer our insight on the key risk issues that are impacting our industry. Additional information via monthly blogs will provide further detail on each of these risks; however, we encourage you to reach out to RCM&D with any questions related to your individual institution’s risk management program.

To request a full copy of the report “Outlook 2020: The Top 10 Risks Facing Educational Institutions” OR to receive monthly updates when more extensive analysis of each risk is posted to the RCM&D blog, please complete the form below this blog.

  1. Coronavirus (COVID-19) – The implications from the new strain of Coronavirus (COVID-19) are immense for the education industry. From study abroad programs to distance learning to cancelled campus events and impacts on enrollment, the ripple effect of the pandemic on education institutions continues to spread almost as fast as the virus itself.
  2. Hard Market – In 2019 and continuing into 2020, rates have increased for most lines of business, and several insurance companies have exited the education market, or have limited the amount of coverage they are willing to provide in excess and umbrella policies, for abuse/molestation and concussion.
  3. Financial Pressures – Declining enrollment trends and increased discount rates for tuition are creating significant budgetary concerns for education institutions at all levels.
  4. Diversity, Equity & Inclusion – From enrollment to board composition, education institutions should be focusing on diversifying their overall population to accurately represent their values and mission.
  5. Traumatic Brain Injuries (TBIs) & Concussions – The availability of coverage for TBI has become an increasingly difficult challenge. Several insurance carriers are placing exclusions on general liability policies, which has reduced the number of insurance companies that are offering coverage.
  6. Sexual Abuse & Molestation – Well-publicized claims, including those from Penn State and Michigan State, are not the only factors impacting the ability to procure coverage or purchase high policy limits for sexual abuse and molestation. Many states have enacted reviver statutes that may now leave insurers responsible for historical claims that they once deemed obsolete due to the statute of limitations.
  7. Student Mental Health – In recent years, the mental health of students has been a growing concern due to increasing cases of suicide among the population. As these numbers continue to rise, campuses are struggling to provide sufficient resources to help students.
  8. Litigation Trends – Overall, jury awards are increasing and the costs associated with defending lawsuits are skyrocketing. One of the key issues is related to litigation financing, an investment strategy by which private equity firms fund attorney fees on behalf of plaintiffs. They recoup their investment via a percentage of the settlement with the goal of receiving the highest award possible.
  9. Social Inflation & Declining Trust – Social Inflation refers to rising costs of insurance claims relating to societal trends, increased jury awards and broader definitions of liability. As society continues to shift, this will also be a key driver of the hard market and overall perception of higher education.
  10. Cyber Risks – Education institutions are prime targets for ransomware and phishing attacks due to the many system integrations and endpoints. Not only are cyber attacks costly from a claims perspective, but the administrative disruption they cause to schools can be extremely debilitating.

We encourage you to reach out to a trusted RCM&D advisor if your institution needs guidance in assessing and mitigating any risks on your campus.