Higher Education Business Insurance
What are among the most important exposures that higher education institutions need to insure?
Insurance for higher education institutions has several unique exposures as compared with other businesses. Due to the nature of the teacher/student interaction, Sexual Abuse and Molestation is among the most important exposures that needs to be insured.
Educator’s Legal Liability insurance is also a key coverage to protect the institution against lawsuits from students for failure to educate.
Colleges and universities also tend to have a large schedule of owned properties, contributing to a need for a properly structured property insurance program including protection for perils of Flood, Windstorm and Earthquake in addition to the standard causes of loss, such as Fire.
Property appraisals for replacement cost value should also be performed on all locations to ensure that the buildings are being insured adequately. These should be updated periodically to account for inflation and as construction costs change over the years.
Do higher education institutions need Cyber Liability insurance?
Every business has a cyber liability exposure to some degree. Cyber exposures related to higher education institutions include data breaches of personally identifiable information, such as social security numbers, dates of birth, credit card information and banking account information.
A costly component to recover from a data breach includes notification expenses and credit monitoring for each affected person, both of which are mandated in most states currently. In addition, a college or university’s website that posts student photos, personal information including grades could face lawsuits arising from the content of the website, such as lawsuits alleging invasion of privacy.
Loss of income or business interruption is also a cyber concern when it comes to failure of network security and the suspension of operations resulting from a virus or hacking.
What insurance coverage is required if a higher education institution leases out its facility for special events?
Many colleges and universities rent out facility space to others for special events. It is important that the tenant have its own insurance coverage in place insuring its liability (including liquor liability, if applicable) while on the premises.
The tenant’s liability insurance should name the institution as an additional insured to extend coverage to the owner in the case of a lawsuit resulting from the special event.
To streamline this requirement and ensure that all tenant users have adequate insurance to protect the institution, a blanket tenant users liability insurance policy can be placed by the institution itself. Each tenant user would simply apply for coverage as respects the specified event and coverage would be placed accordingly. This way, the institution can rest assured that it is being properly protected during facility rentals.
How can a higher education institution protect itself from lawsuits from faculty members?
Usually, these types of lawsuits involves allegations such as unfair hiring or firing practices, failure to promote or grant tenure, discrimination and the like. A combined Directors & Officers and Employment Practices Liability insurance policy would cover the institution as well as its Directors & Officers for both legal fees/defense costs as well as the demand for a covered claim.
The appropriate limit and deductible should be evaluated regularly based on the size and financial strength of the institution. It is also recommended that the Directors & Officers and Employment Practices Liability be written with the same carrier and preferably on one combined policy to avoid any gaps in coverage and issues coordinating defense and claim settlement since these types of lawsuits often overlap between the two coverages.