While both public and private educationalinstitutions face many of the same types of claims, the climate isarguably more hazardous for private institutions—which don't enjoythe liability protections afforded to government entities in manystates.

Additionally, private schools have increased their exposure asthey've expanded both their academic and extracurricular programsto better compete for students.

“Private schools have added more travel exposure in particular,including travel abroad, in the K-12 grades that we hadn't seenbefore,” says Deb Denker, industry manager in the education sectorat Travelers. “They're not just sightseeing; they're doing serviceand other activities that increase exposure to injury.”

“Schools have had foreign travel exposure for some time, butthey haven't faced it well,” observes Ric Valentino, director ofthe education practice at agency RCM&D in Baltimore. “Theyhaven't had the right protocols for keeping both students andparents informed about risk, haven't always had the right coveragein place, and in some cases haven't gotten the rightpermissions.”

Travel Leads to Large-Ticket Losses

Earlier this year, a Connecticut jury awarded $41.7 million toCara Munn, former student of Hotchkiss School in Lakeville, after atick bite suffered on a 2007 school trip to China caused her tocontract a case of encephalitis, which makes it difficult to speakor swallow. The school, which declined to comment on the case whileit is appealing the award, was faulted for not specifically warningMunn and her parents that she would be traveling to a tick-infestedarea and how to adequately protect herself.

“The issue here is that these private K-12 schools aren't usedto all of the risk assessment you need to go through when you'resending students out, particularly minors where the school's dutyis much greater than when you have adult students going,” saysDenker. As a result, both carriers and brokers are fielding morequestions from schools around potential claims related totravel.

“We are seeing schools that do internationaltravel buying foreign coverage to address the exposure,” says MaryWilliams, vice president of Willis of Pennsylvania. “We're makingsure it's covered in the umbrella programs we offer as well.”

Abuse and molestation claims are also on the rise. “We've seenmore reported allegations of abuse in the last 18 months than inthe last 25 years,” claims Reid Sandner, executive vice president,Willis of Pennsylvania. “In the past, if we asked for $1 millioncover for abuse or molestation, it was no big deal. Today carriersare asking for training and background checks for employees andvolunteers. They are asking if there are age-appropriatediscussions with students around abuse. We're seeing a lot moreawareness by schools of the potential for claims.”

Sandner attributes part of the rise in claims to states'expansion of the statutes of limitation for reporting incidents.Denker says that public awareness of abuse has also drivenincreased reporting.

“There is much more press about it—it's not shoved under the rugas it might have been in the past,” she notes, adding that the typeof abuse claim activity has also been changing.

“A lot of 'child-on-child' claims are becoming more common inaddition to the traditional employee/teacher and child,” she says.“Even if allegations are proven to be false, you still have defensecosts to contend with.”

An increase in awareness is also behind a growth in claims undereducators' professional liability coverage for failure to educate,which has led to 50 percent or greater premium increases anddoubling of deductibles on the line.

 “This particular issue is more prevalent in our regionof our country, which is very litigious,” says Williams of theKeystone State. “There is a group of attorneys here that is reallypushing these cases.”

Traditional Losses Still Dominate

Although abuse claims may garner headlines because of theirsensational nature, frequency of claims remains highest in thetraditional areas of bodily injury in both auto and GL fromaccidents, workers' compensation, and property.

“It's still slips, trips and falls. It's still playgroundinjuries. Those are the areas that produce a constant stream ofclaims,” says Williams.

“Our worst claims involve auto, particularly in private schoolswhere [you don't have] the immunities and caps on liability anddamages,” Sandner adds.

In property, Travelers reports seeing weather claims pop up inunexpected locations in recent months.

“We always have claims in the traditional wind, hail, andtornado zones, but we are now getting weather events in areas wetypically haven't, such as inland Texas where there isn't a coastalexposure,” says Robin Leal, underwriting director in Travelers'public services division. “And, the amount of damage when severeweather happens tends to be significant because of the design andconstruction of many school buildings.”

Indeed, since many schools have flat roofs, they areparticularly susceptible to water leakage from storms or loss toroof-mounted equipment resulting from straight-line winds. Also,the age of many of those buildings presents several challenges forschools, including maintaining adequate replacement cost values andthe increased expense of bringing damaged structures up tocode.

As Valentino points out, “The problem in the Northeast is thatschools tend to be in historic buildings. Property policies may notprovide the right protection without endorsements. Schools need tounderstand the uniqueness of their properties and establish theappropriate risk transfer with their insurance company.”

The one thread shared among any type of educational institutionis that the risks they face continue to multiply, adds Denker.“Every time you turn around, there seems to be a new exposure or anew challenge to work on.”