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When the Pattonville School District in St. Ann, Missouri, decided to provide laptop computers for students, it found the commercial insurance market ill-prepared to meet the program's unique needs.
The district's primary property policy would not be of much use for damage or loss claims for individual laptops, since the policy's $1,000 deductible was more than the cost of a computer.
Alternatively, a handful of insurers offered specialized electronic device policies with lower deductibles, but annual premiums in excess of $100,000 were too expensive for the district to justify in 2012, given the nature of the risk.
“We realized we had to develop a self-insured program where the parents and students would have some skin in the game, because they're the ones with care and custody of the devices,” said Scott Wightman, area executive vice president at Arthur J. Gallagher & Co. in St. Louis.
Working with school district Chief Financial Officer Ron Orr and technology services director Greg Southard, Gallagher developed and last year launched One2One Risk Solutions, a Web-based inventory and claims management platform serving as the online hub of the self-funded laptop insurance program, financed in large part by individual damage waivers sold to parents. They pay up to $40 for the damage waiver with a $25 deductible for the first claim, $50 for the second claim and $100 for all subsequent claims.
“That way, there's a contractual arrangement between the schools and the parents saying that if the device their child is given is damaged or lost, the school takes care of the repair or replacement costs, minus a deductible,” Mr. Wightman said. “The idea is to shift some of the financial interest over to the parents, but in a reasonable way.”
Following the program's successful implementation in the Pattonville School District, Gallagher began marketing One2One Risk Solutions to other school districts, at first in the Midwest and eventually nationwide.
As of February, Gallagher said it has integrated the One2One Risk Solutions with existing risk management systems in 45 school districts in Illinois, Indiana, Michigan, Minnesota, Missouri, Ohio, Wisconsin, Texas and Wyoming.
Developers of the program, a winner in the 2015 Business Insurance Innovation Awards, credit its flexibility in design and function for the rapid growth in utilization.
“Every one of our clients has a different opinion on how implementation should go, different requirements and different demographics that they have to consider,” said Steve Wightman, a St. Louis-based account executive at Gallagher. “Some of them want to charge more upfront for the waivers, some of them want to charge more on the deductible end.”
“What we've learned is that our goal needs to be to put them in the driver's seat,” he said.