American Agent & Broker

AAB: In brief, how would you characterize the marketplace for charter schools?

Debbie Anglin

AAB: Is this a growing field?

Anglin: Most definitely. Over the past four to five years, more states have enacted charter laws all the time, which is something we keep an eye on. The number of independent schools is also growing because baby boomers with school-age kids have more flexibility and disposable income to send them to private schools.

AAB: How are charter schools regulated?

Cheryl Griffin

AAB: Briefly describe coverage regarding terms and limits.

Anglin: Thomco writes property, general liability with limits of up to $3 million, abuse and molestation, educators legal liability with limits up to $2 million, crime, inland marine, automobile with $1 million in limits and umbrella with limits up to $5 million with Stonington Insurance Co. The workers' compensation is written with the Zurich Insurance Co., with the student accident coverage offered through Hartford. We'll also eventually offer cyber-liability coverage. Typical premiums for an average charter school package can run from $17,000 to $20,000, while the cost for workers' comp depends on what state they're in.

AAB: Are there any particular insurers that are aggressive about writing this business?

Anglin: Philadelphia and Hartford are the biggest players.

AAB: In general, what are the biggest challenges for agents writing this specialty?

Griffin: Probably the biggest issue for our more than 4,000 agents is getting their foot in the door with the head of a school and having that person take the time they need to describe the school and its risks. Because the charter school administrator typically handles everything from managing the school to risk management and purchasing insurance, they just don't have the time they need to sit down with the agent and give them all the information they need. Once they have coverage in place with a certain carrier, they tend to leave it there year after year. They're understandably more concerned with the education and safety of the students.

AAB: What types of losses are typical for charter schools?

Griffin: The biggest loss driver for this program is EPL stemming from teachers. We haven't suffered through any major losses yet, but based on our research, the most typical claims involve negligent hiring or firing practices, discrimination claims on part of teachers, and related issues.

AAB: How is pricing for this line of business?

Anglin: Similar to the rest of the marketplace, pricing for charter school coverage is competitive. Thomco just launched our charter school program last year, so it's hard for us to judge what's happening with renewals. On new submissions, clients are looking for somewhat of a savings depending on where the original coverage was placed; however, we haven't seen that they expect it to be drastically reduced.

AAB: What role do state laws play in risk exposure for charter schools?

Griffin: Because each charter school is public, and each run by its own charter, each school must meet certain requirements by the school board before they can be granted permission to operate by the state. This means they already have to provide a lot of information and they're more closely scrutinized than public schools, which is actually beneficial in preventing losses.

AAB: What do you provide agents and customers in the way of loss control?

Griffin: We have risk management personnel on staff who are available to go out, inspect and help any insured we provide coverage for. Most of our other related programs already have specific Web site information for risk managers, and we're now creating a charter school risk management sit where our customers can get a lot of information online.

AAB: Are you seeing a lot of competition for this specialty?

Anglin:

AAB: How can agents succeed in specializing in charter schools?

Griffin:


The History of Charter Schools

Alternative Schools at a Glance