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

Leading school-insurance broker Nancy Sylvester, the Baton Rouge, 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 manage it.

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

A. Special needs includes a myriad of challenges for students, some subject to federal Law, others not:

* Physical

* Psychological

* Learning differences

* Behavioral

* Emotional

* Basic needs at home not being met

* Temporary emotional or behavioral issues generated by an unfortunate event or events

Federal law requires that all students be provided free and appropriate education, preferably in a mainstream environment or at least in an environment with as few restrictions or differences as is 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 among children  by parents, teachers, administrators, physicians and lawyers.  

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

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

Q. What kind of losses are schools experiencing—and is frequency, severity or both the problem?

A. With the exception of bodily injuries to teachers and to students, for the most part the claims are professional-liability claims with coverage provided under educators' legal-liability policies—school board legal-liability coverage. 

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

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

Risk management's attention doesn't stop at the schoolhouse door. Bus transportation for special needs students is another growing topic of concern.

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

A. In the last two to three years the focus on risk management concerning special needs challenges has risen. The number of special-needs students has increased in part due to awareness and education.  Many parents are quick to litigate. School district budgets are shrinking.    Risk managers are reaching out and requesting assistance. They want to meet or exceed federal-education requirements while keeping their entire 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 the issue:

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

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

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

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

* Some will not allow excess or umbrella coverage over this exposure.

Those carriers providing coverage are cautious. Even if school districts pass carriers' loss-history test, insurers still review the districts' policies and procedures and might mandate revised policy wording before binding coverage.

Q. Are any schools proactively addressing this problem, and have they been successful? What measures are most effective?

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

* One school district has received a $726,000 federal grant to operate an academic and mental-health treatment center for students. One of a handful of similar programs of its kind in the country, students receive specialized, individual attention by medical and education professionals.  

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

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

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

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