How to protect private education providers

Managing risk while maintaining a healthy bottom line is a goal for brokers, underwriters and clients alike. The challenge is ensuring the right balance between what a client needs and may be able to do without — or have to go without when budgets are tight.

Education is no different. That said, schools have some unique risks. Among them, student and workplace safety and, in the context of many private schools, international travel.

“There tends to be a lot of off-campus activity with private schools,” says Jeannie Wiens, director of national programs for Westland Insurance Group. “Known as transformative learning opportunities, they often take place off campus including out of province.

“This requires us to work as a partner alongside our schools to mitigate and manage this type of risk. The goal is to keep our schools and students as safe as possible and not be a barrier to potential learning opportunities.”

Range of risk

Other risks in private schools are similar to exposures associated with public schools, which tend to self-insure or engage in province-wide reciprocal exchanges. Policies for private education entities typically consist of coverages such as abuse liability, business interruption, crime, commercial property, directors and officers coverage, and more.

No matter how customized the underwriting solution, Wiens says educators’ liability is paramount, so it is embedded into every policy on Westland’s exclusive school program.

Career colleges add a unique wrinkle to private education policies. Given the opportunities in college for practicum work, Wiens says workplaces are typically far more stringent when it comes to considering having a student on site. Health authorities, for example, may require professional liability insurance, even though students are not yet classified as professionals in their chosen fields.

Westland currently provides education coverage to close to 200 private schools and career colleges in Canada, almost all of them west of Ontario. Wiens says Ontario is a target market Westland intends to grow as part of their National Programs strategy. 

Claims patterns

What are typical claims underwriters may see in private schools and colleges?

“Most of the claims we see are around employment practices liability,” says Wiens. “Employees feel they were wrongfully terminated or, in cases of faith-based schools, where people may sue for discrimination.”

These cases make up about half of all claims in the sector. The severity of the claims depends on individual circumstances. In one example Wiens shares, a claimant alleges wrongful dismissal costs of $11,000 in damages and legal costs. In another, the claimant sues for $100,000 in damages and $25,000 in legal fees.

The balance of claims is divided about equally between water losses versus everything else.

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“Water claims are an especially big concern on the West Coast,” Wiens says. “Since COVID-19, we have learned so many meteorological terms. Atmospheric rivers to heat domes. Global warming has made bigger sways with the weather changes, and we are seeing more water claims for our private schools and colleges.”

Examples of the remaining 25% of claims include wrongful expulsion cases won and lost, and a third-party bodily injury when a parent fell in a school parking lot. Wiens also cites a class action lawsuit in which nursing students sued a private college for breach of contract and duty of care, a case with alleged damages in excess of $1.5 million.

With so many risks to consider, brokers need to have proactive conversations with prospective and existing clients. “Insurance is a partnership, not a transaction,” Wiens stresses. “Brokers need to have meaningful discussions throughout the year with clients and not just get in contact at renewal.

“Things can change. The more often we talk and connect, the better partners we will become, which in turn creates long-term loyalty for everyone involved.”