Liability Benchmark Report for K-12 Boarding and Day Schools
The unique risk exposures of independent schools create challenges for school administrators and financial officers. In this unique landscape, these officers are required to protect the financial viability of their institution, including its endowment; assure the efficacy of its educational processes; safeguard the school’s reputation, its staff and students; and ensure compliance with all regulatory demands and requirements. All of this is done while balancing the costs and benefits of any risk retention or transfer decisions considered.
The insurance purchasing decision is often done in the absence of good information that would allow a buyer to compare their decision with appropriate benchmarks. While comparisons to peer institutions do not necessarily lead to optimal decisions, they at least provide a framework of what choices peer institutions and colleagues are making.
The Assurex Global Partnership is comprised of 54 premier insurance brokers in North America, plus an additional 54 outside of North America. The scope of the North American Assurex Global Partner client base provides us with the ability to see into the purchasing decisions of hundreds of independent schools. In an effort to provide our clients with information intended to lead to better decisions, we commissioned a study of those agencies’ independent school client population. This report presents an analysis of the results of that study.
To request a copy of the report, please complete the form at the bottom of this page.
We received data on the purchasing decisions of more than 300 independent schools, which ranged from highly selective, coeducational, college preparatory schools to local charter schools. We bifurcated our data into day schools and boarding schools and then subdivided the data based on student enrollment. As you would expect, there are significant differences between the schools represented in our survey. Despite the differences, we believe that there is enough homogeneity among the schools to provide useful information for a buyer seeking to compare their decisions with those of similar institutions.
While the range of risk management and insurance decisions that schools encounter is quite broad, we have limited the focus of this study to educator's legal liability, excess liability, fiduciary liability, and cyber liability. Anecdotal evidence indicates that these coverages and the exposures they protect are of particular interest to independent school trustees and board members, administrators, and financial officers.
There are obvious similarities between the risks and exposures of day schools and boarding schools. At the same time, there are significant differences between the risk management exposures of a day school versus a boarding or residential program. These differences are reflected in the demographics associated with the different types of institutions. So how do these differences impact the insurance buying decisions of these institutions? Here are some highlights from the report:
- Over 1/3 of day schools carried educators legal liability limits of $1 million. None carried more than $40 million of coverage.
- The vast majority of boarding schools carried in excess of $25 million in limits for this coverage, while only a small minority of boarding schools carried limits of $5 million or less.
- The data shows that both day schools and boarding schools purchase significant excess liability insurance limits.
- Many schools in this survey purchase excess liability limits as part of consortium or group programs, sometimes with shared high excess limits; therefore, data in this category should be reviewed with that in mind.
- Eighty-four percent of schools carry some form of insurance protection against cyber breach reporting, credit monitoring and forensic services.
This report does not replace a thoughtful review of any given school’s risk management exposures and risk transfer decisions. The survey simply reflects our belief that access to information allows buyers and risk managers to make more informed decisions.
Risk management and insurance purchasing are complex decisions. RCM&D possesses the technical expertise and carrier connections to help you through that process. We encourage you to reach out to an RCM&D representative with any questions you may have.
We would also like to thank the Assurex Global Partners that participated in this report. It takes significant effort to pull together the data from hundreds of clients into a useable format. Without the assistance of each of those Partners, this report would not exist.