Educational institutions have faced a multitude of issues on all fronts as a result of the COVID-19 pandemic. However, one of the most significant risks is one often without a clear answer; managing uninsurable COVID-19 risks.
It is critically important to understand the details of the wide range of pandemic or communicable disease exclusions and how they impact your operations. While some insurance policies may be leveraged to fill the gaps created by COVID-19 exclusions on existing general or professional liability policies (for example, medical malpractice for claims stemming from student health services or clinical rotations), there will likely still be holes in coverage.
The Key Issues
The COVID-19 pandemic has caused underwriters to become much more stringent. Communicable disease and COVID-19 specific exclusions have become commonplace as underwriters require more information than ever from policyholders. According to the Council of Insurance Agents and Brokers (CIAB) Supplemental COVID-19 State of the Market report, insurance carriers are seeking information regarding financial stability, PPP (Paycheck Protection Program) loans, re-opening practices, hiring/firing practices, and COVID-19 safety precautions from insureds during renewal periods via various questionnaires.
Communicable Disease Exclusions
While the verbiage varies by insurer, the intent of a communicable disease or virus exclusion is to exclude any claims arising from a virus or communicable disease.
For schools, the impact of this exclusionary language can be far-reaching. One of the initial questions for schools at the onset of the pandemic was, “What if we are sued because a student ‘caught COVID’ on campus?” While pinpointing the exact location someone contracted COVID-19 is nearly impossible, the concern about defending such allegations of negligence that led to bodily injury was justified. These claims would likely be denied outright if the insurance policy has a communicable disease/virus exclusion.
Currently, many schools are finalizing plans on whether or not to test for COVID-19 themselves or contract with a third party. While the risk is low, there is a concern of a lawsuit alleging that the institution incorrectly interpreted the test result, causing bodily injury. This type of claim would also likely be denied by a policy that includes the virus/communicable disease exclusion.
What It Means For Education & Recommendations
From an insurance perspective, there are several steps to take when it comes to communicable disease and virus exclusions:
- Make sure you fully understand the scope of any communicable disease or virus exclusion.
- If you have a student health center that provides testing or treatment of students with COVID-19, carefully review your current professional liability policy to ensure that it does not contain a communicable disease or virus exclusion. Most medical malpractice policies do not contain such exclusions and therefore have become a viable solution for many schools that previously insured this exposure on a liability package policy.
- For schools with nursing, physical therapy or other health professional programs, it is critical to review your clinical affiliation agreements with the host sites your students attend for their clinical rotations. The medical malpractice policies noted above often include the liability exposure for clinical rotations of your students and in compliance with insurance requirements contained within the clinical affiliation agreements.
- Most institutions have made their decision regarding vaccine requirements for students, faculty and staff returning this fall. Allegations of discrimination and wrongful termination for non-compliance with vaccine mandates or other employment-related matters insured on a management liability policy likely do not contain the virus or communicable disease exclusions that are common on general liability policies. It is important to review these exposures with your broker.
Insuring COVID-19 exposures is a tall task for organizations in any industry, but especially for educational institutions. The RCM&D education practice can help you navigate this unique landscape and provide risk management and insurance solutions to protect your institution from risks stemming from COVID-19.