K-12 schools face a variety of risk-management issues ineducating special needs students—and those challenges are onlygrowing for many schools as their resources are shrinking.

Leading school-insurance broker Nancy Sylvester, the BatonRouge, La.-based managing director of the Public Entity &Scholastic Division at Gallagher Risk Management Services Inc.,talks about why this risk is growing and how schools can manageit.

Q. How is educating students with specialneeds becoming a greater risk-management challenge for K-12schools?

A. Special needs includes a myriad ofchallenges for students, some subject to federal Law, othersnot:

* Physical

* Psychological

* Learning differences

* Behavioral

* Emotional

* Basic needs at home not being met

* Temporary emotional or behavioral issues generated by anunfortunate event or events

Federal law requires that all students be provided free andappropriate education, preferably in a mainstream environment or atleast in an environment with as few restrictions or differences asis possible. Various federal laws apply:

* Section 504 of the Rehabilitation Act

* Individuals with Disabilities Education Act

* The Americans with Disabilities Act

* Title IX of the Education Amendments

None of these laws are new. So what is going on?

There is an ever-expanding awareness of differences amongchildren by parents, teachers, administrators, physicians andlawyers.

For example, the number of diagnosed autism cases in the U.S.has risen dramatically over the last few years, and now some formof autism impacts one in 150 children.

Plus, just as the need for specialized, appropriate instructionis rising, school budgets are diminishing.

Q. What kind of losses are schoolsexperiencing—and is frequency, severity or both theproblem?

A. With the exception of bodily injuries toteachers and to students, for the most part the claims areprofessional-liability claims with coverage provided undereducators' legal-liability policies—school board legal-liabilitycoverage.

Though various states provide immunity protection to its schooldistricts, federal claims are not eligible for immunity. Federallitigation is an uncapped exposure for a school district.

Incidents are frequent—even daily. The result of an incident canbe severe, including debilitating injuries and suicides.

Risk management's attention doesn't stop at the schoolhousedoor. Bus transportation for special needs students is anothergrowing topic of concern.

Q. Why is this happening, and when didschools first notice this problem was growing?

A. In the last two to three years the focus onrisk management concerning special needs challenges has risen. Thenumber of special-needs students has increased in part due toawareness and education. Many parents are quick to litigate.School district budgets are shrinking. Riskmanagers are reaching out and requesting assistance. They want tomeet or exceed federal-education requirements while keeping theirentire student population and teachers safe. It's a huge task.

Q. What has been the impact on schools'insurance programs?

A. The carriers have reacted differently to theissue:

* Some will provide general liability, auto liability, workers'compensation and property, but not educators' legal liability. ELL must be placed through an alternate stand-alonecarrier.

* Some will provide ELL but prefer a retroactive inception dateto limit their exposure. But that could create a gap in coverage asopposed to providing full prior-acts coverage.

* Some will provide ELL but will require a higherself-insured retention than for other lines.

* Some will endorse a sub-limit on the exposure.

* Some will not allow excess or umbrella coverage over thisexposure.

Those carriers providing coverage are cautious. Even if schooldistricts pass carriers' loss-history test, insurers still reviewthe districts' policies and procedures and might mandate revisedpolicy wording before binding coverage.

Q. Are any schools proactively addressingthis problem, and have they been successful? What measures are mosteffective?

A. School districts are taking a variety ofmeasures to address the issue.

* One school district has received a $726,000 federal grant tooperate an academic and mental-health treatment center forstudents. One of a handful of similar programs of its kind in thecountry, students receive specialized, individual attention bymedical and education professionals.

* School transportation leaders are developing transportationguidelines for special-needs students.

* Districts are receiving training in identifying at-riskstudents and in safety—both their students' and their teachers'safety.

* Insurance programs are being carefully reviewed for theappropriate risk-retention levels and limits of coverage.

* Carriers are being called upon to provide resources and inmany cases are doing so.