A recent spate of complaints and penalties assessed againstuniversities for violations of the Clery Act, which requiresqualifying colleges and universities to keep and regularly discloseinformation about crime on and near their campuses, is yet anotherreminder that higher education institutions should look forEducators Legal Liability (“ELL”) coverage that is closely tailoredto their unique needs.

 Students at four major universities(Dartmouth College, Swarthmore College, the University of SouthernCalifornia and the University of California, Berkeley) haverecently filed federal complaints with the U.S. Department ofEducation (DOE) alleging that their schools had violated theprovisions of the Clery Act.

 The provision is named after Jeanne Clery, a LehighUniversity freshman who was raped and murdered by a fellow studentin her residence hall in 1986. Following her death,Clery's parents argued that better information about crime andsafety statistics at Lehigh would have weighed in their decision toenroll Jeanne at Lehigh in the first place—or at the very leastwould have prompted the young student to be more careful while atschool. Their campaign for increased transparencyculminated in the signing into law of the Jeanne Clery Disclosureof Campus Security Policy and Campus Crime Statistics Act in1990.

 For colleges and universities, the costs ofnon-compliance with the Clery Act are high. The DOE, which istasked with the enforcement of the act, has the authority toconduct random audits to check compliance and to assess a fine perfinding of violation of any provision of the law. In themost extreme cases, should the findings be damaging enough, aschool could lose access to various levels of financialaid. 

 The fines can add up quickly. In May 2013, YaleUniversity was fined $165,000 by the DOE for inadequate reportingof campus crime statistics after a seven-year investigation ofYale's compliance with the Clery Act. In 2008, EasternMichigan University was fined a record $357,500 for its failure toissue a proper warning on campus following the assault and death ofa student in 2006. The assessment of fines by theDepartment of Education appears to be increasing as the DOE rampsup its Clery Act audit activity.

 When securing ELL coverage, colleges and universitiesshould pay close attention to how their policy deals with the CleryAct. 

 ELL policies routinely include an endorsement thatoffers a small sublimit for fines and penalties that result from aClery Act violation. Schools should ensure that thesublimit offered is sufficient for their purposes, particularlyfollowing the recent increase of the fine per violation from$27,500 to $35,000. In order to access coverage, schoolsshould also ensure that a Department of Education audit wouldtrigger the definition of a claim under their ELL policy.

 A core challenge of risk management is to plan for theunpredictable. While it is impossible to say in advance howcoverage would respond to any given situation, colleges anduniversities should seek to obtain clarity of intent from theirD&O carrier. It is particularly important for theincreasingly visible issue of Clery Act violations—where currentcoverage may not be enough.

Bert Spunberg ([email protected])is U.S. Executive Risk Practice Leader at international specialistinsurer Hiscox.