An important judgement was made last week that will potentially affect charter schools throughout the nation. A Pennsylvania judge threw out a lawsuit against a school district and high school assistant principal accused of violating a student’s 14th Amendment rights because they were unwilling to guarantee their child’s safety against other students who were bullying her.
I don’t want to spend this post arguing over whether or not the decision and actions made by the school administrators was correct or incorrect. I want to focus on the insurance implications of this lawsuit and how a proper insurance policy will actually absorb all of the defense costs associated with this type of lawsuit.
General liability insurance policies are designed to pay for claims arising from bodily injury and property damage for incidents where the policyholder is found negligent. Additionally a general liability policy must also provide defense costs for any claim made against the policyholder unless the insurance company determines the claim is excluded on the policy.
So for a situation like this one where the school is being accused of negligence in regards to the student’s well-being, the general liability policy will defend the accused throughout the court case.
This one of the little-known factors of an insurance policy that becomes extremely important when litigation pops up. Most liability insurance policies will provide some type of defense for the policyholder. The amount of defense costs the insurance policy will provide depends upon the policy, but they will usually either provide unlimited defense costs or defense costs up to the liability limit within the policy. When defense costs are insides the limit of liability of the policy, there is the risk that you could potentially use up your entire limit of insurance before the actual judgement amount is even paid.
If your charter school has additional questions on your general liability policy will respond to claims, please contact our office at (702) 507-6999.
