The 10 Biggest Insurance Risks Facing Charter Schools Today
Charter schools are more than classrooms and teachers. They are complex organizations responsible for students, employees, buildings, technology, transportation, finances, and countless daily interactions with parents and the community.
Each of those responsibilities creates potential risk.
While no insurance policy can eliminate risk, the right charter school insurance program can help protect a school when something goes wrong.
Here are 10 of the biggest insurance risks charter schools should be thinking about today.
1. Student Injuries
Students spend a significant portion of their day on school property—and accidents happen.
A student could be injured:
- On a playground
- During physical education
- Playing sports
- In a classroom
- In a school hallway
- During a school-sponsored event
- On a field trip
Not every student injury means the school is legally responsible. However, when a school is accused of negligence, the resulting claim can create significant legal and financial exposure.
General liability insurance can help address certain covered claims involving bodily injury.
2. Cyberattacks and Data Breaches
Schools have become increasingly dependent on technology.
They also possess valuable information, including student records, employee information, financial data, and other sensitive information.
Cybercriminals know this.
Ransomware, phishing attacks, compromised email accounts, and data breaches can result in substantial expenses.
Cyber insurance for charter schools can help address certain costs associated with responding to a cyber incident.
But insurance is only one piece of the puzzle. Employee training, multi-factor authentication, backups, access controls, and cybersecurity policies are equally important.
3. Property Damage
A major property loss can disrupt a school’s operations overnight.
Fire, severe weather, water damage, theft, and other covered events can damage classrooms, technology, furniture, books, equipment, and other property.
The physical damage is only part of the problem.
A school may also need to find temporary facilities or incur additional expenses to continue educating students.
That’s why property coverage and business interruption protection deserve careful attention.
4. Employment-Related Claims
Schools are employers, and employers can face lawsuits from current or former employees.
Claims can involve allegations of:
- Discrimination
- Harassment
- Wrongful termination
- Retaliation
- Failure to promote
- Other employment practices
Even when an allegation has little merit, defending against it can be expensive.
Employment Practices Liability Insurance can help address certain covered employment-related claims.
5. Abuse and Misconduct Allegations
Schools have a unique responsibility to protect children.
Allegations of abuse or misconduct can have devastating consequences for students, families, employees, and the school itself.
Schools should carefully evaluate whether their insurance program includes appropriate coverage for abuse and molestation allegations and understand the applicable limits, exclusions, reporting requirements, and other policy conditions.
Risk management is equally important. Background checks, training, reporting procedures, supervision, and clear policies can all play an important role.
6. Board and Leadership Liability
Charter school boards make significant decisions about budgets, employment, policies, expansion, contracts, and school operations.
Those decisions can sometimes lead to disputes or allegations of wrongdoing.
Directors & Officers insurance can provide protection for certain claims against directors, officers, and other covered individuals arising from their management of the organization.
This is particularly important because school leaders may assume that general liability insurance protects them from every type of lawsuit. It doesn’t.
7. Transportation Accidents
Field trips, athletic events, extracurricular activities, and other school activities can involve transportation.
A serious accident involving a school-owned vehicle—or potentially an employee’s personal vehicle being used for school business—can create substantial liability exposure.
Schools should understand their exposure involving owned, hired, and non-owned vehicles and make sure their insurance program addresses those risks appropriately.
8. Slip-and-Fall and Premises Liability
Schools have thousands of people walking through their facilities.
Wet floors, icy sidewalks, uneven pavement, defective stairs, inadequate lighting, or other property conditions can result in accidents.
Good facility maintenance and documentation are important risk-management tools, but schools should also make sure their general liability coverage is appropriate for their operations.
9. Financial Crime and Fraud
Schools manage significant amounts of money.
Unfortunately, fraud can occur even when an organization has established financial controls.
Potential exposures include:
- Employee theft
- Forgery
- Funds transfer fraud
- Credit card fraud
- Other forms of financial crime
Crime insurance can provide protection against certain covered losses.
Strong internal controls should still be the first line of defense.
10. A Liability Claim That Exceeds Policy Limits
One of the biggest risks isn’t necessarily a particular type of accident. It’s having insufficient limits when a major claim occurs.
A serious injury, large property-related claim, or significant lawsuit could potentially exceed the limits of an underlying insurance policy.
That’s where umbrella or excess liability insurance can become important.
For many organizations, purchasing additional liability limits can be a relatively straightforward way to strengthen the overall insurance program.
Managing Risk Starts Before a Claim
Insurance is important, but it’s only one part of a school’s risk-management strategy.
Charter schools should also consider:
- Regular facility inspections
- Employee training
- Background checks
- Cybersecurity procedures
- Incident reporting
- Driver safety programs
- Emergency preparedness
- Document retention
- Written policies and procedures
- Regular insurance reviews
The goal isn’t to eliminate every possible risk. That’s impossible.
The goal is to identify the risks that could seriously affect the school and build a plan to manage them.Review Your Charter School Insurance Program
As a school grows, its risk profile changes.
New campuses, additional employees, larger enrollment, new vehicles, athletic programs, technology investments, and other changes can all affect the school’s insurance needs.
A periodic insurance review can help identify potential coverage gaps before they become problems.
The best time to discover that your insurance program doesn’t adequately address a risk is before the claim—not after it.
