BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Schools hit with rate hikes as pandemic complicates planning


As schools and colleges across the country face risk management decisions about when and how to let students back to the classroom, the institutions face a hardening insurance market and more restrictive coverage.

Educational institutions face enhanced risks related to the rising profile of issues including of sexual misconduct and traumatic brain injury in athletics, which sources say have led to increased claims and sometimes more restrictive policy language.

A large portion of the educational insurance market renews on July 1 with other educational pools and institutions renewing in the fall.

Higher education coverage across all lines rose 18% on average for July 1, 2020, compared with 15% across the overall commercial market, said John McLaughlin, senior managing director, higher education practice for Arthur J. Gallagher & Co. in Rolling Meadows, Illinois.

“Part of that increase is due to what has been some very challenging loss experience in the higher education arena,” he said.

Gallagher is increasing commercial insurance rate projections in 2020, Mr. McLaughlin said. “We’re seeing that to a greater extent in the higher education market with the loss of capacity, particularly in excess liability lines.”

The market got harder each week in the run-up to the midyear renewals, said John Stephens, president of property and casualty for Keenan & Associates, a unit of AssuredPartners Inc. in Los Angeles.

“What we’re seeing across the board is less limit, higher retentions, more restrictive terms and conditions, and increasing rates,” he said.

The more restrictive language is coming in the form of communicable disease exclusions and wildfire deductibles, Mr. Stephens added.

There is a “massive adjustment in pricing and deductible going on in property and that was a major challenge for school districts around at this renewal,” said Dave Marcus, area chairman, retail property/casualty operations for Arthur J. Gallagher & Co. in Boca Raton, Florida. 

Large Florida school districts such as Dade or Broward counties have catastrophe exposed properties and insured values in the billions of dollars. Such policyholders have eight-figure per occurrence retentions, including named storm deductibles, Mr. Marcus said.

Most school districts, however, buy coverage through pools, to increase smaller constituents’ buying power. Limits are often rolled out to members by the pool, Mr. Stephens said, essentially eliminating one decision and allowing individual buyers to vary retentions. 

Coverage for both sexual abuse and molestation and traumatic brain injury has seen cutbacks in capacity, according to John Klecha, president of Connecticut operations, USI Insurance Services Inc., based in Meriden, Connecticut.

“Part of that increase is due to what has been some very challenging loss experience in the higher education arena,” he said.

“There’s more pressure on K-12 for (sexual abuse and molestation) cover,” which is harder to underwrite because younger children are judged more vulnerable, Mr. Klecha said. Higher education shares the exposure, with a higher incidence of student to student incidents, he added.

Transportation is also a significant risk for educational institutions, said Mark Turkalo, Marsh LLC’s national education and public entity placement leader, based in New York. In addition to delivering students to school, there is transportation for student-athletes and travel for teams. “That’s a huge exposure,” he said.

Timing of renewals has become a more important issue as planning and negotiations take longer in the rising market and amidst the confusion of the pandemic.

“Every risk takes more time now because the underwriters are asking a lot more questions,” Mr. Klecha said. “We used to start 120 days out. Now it’s 150 to 180 days.”

Mr. McLaughlin said he has already started meeting with clients which renewed on July 1, 2020, to plan next year’s renewals.

The continually changing nature of the pandemic, public health rules and national hotspots has made looking ahead difficult.

Many schools, districts and institutions are still finalizing their plans for the upcoming school year.

“We’re weeks away and some have still not made a decision,” Mr. Turkalo said. “There is a very mixed response right now,” and “time is closing in.” 

“Risk management is about the unknown, and there’s never been anything more unknown,” said Mr. Marcus. “Unknown drives price.”