1. Society of Risk Management Consultants WRM America Indemnity Company
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

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

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

4. Exposures – Historic Time Line
2009 Facebook Most Used Social Networking Service
Virginia Tech
April 2007
% of Instructional Rooms have Internet Access
June 1998
Farragher
Ellerth Cases
September 11, 2001
2004 iSafe Study Regarding Cyber Bullying
1994
The Highest Serious Student Violence Rate
In September 2006, ABC News reported on a survey prepared by I-Safe.Org. This 2004 survey of 1,500 students between grades 4-8 reported:
Columbine
April 1999
2009 H1N1 Outbreak
2011 Loss of state subsidies
2003 – Ryan Halligan Suicide

5. Leading Loss Drivers – Percentage of all Claims

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

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

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

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

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

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

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

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

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

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

16. Risk Control – Leading Loss Drivers
Property
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 GL

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

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

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

20. Risk Control – EL “Organizational” Approach

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

22. Risk Transfers
Contractors
Professional consultants
Facility users

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

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