Insurance Questions to Ask; Answers to Have

The Business Office is the foundation of private school operations. A well-run office, with the correct procedures, plans, and safeguards in place, helps keep all other aspects of the school in good order.

As part of running an effective office, the Business Manager or CFO must ask the right questions and take the right steps. Today we’ve compiled some questions to ask when it comes to your school’s insurance policies.

Ask yourself, your team, and your broker these questions, and use the answers as a guide for areas where you might need to focus your efforts.

General Insurance Questions

• Have you spoken with your broker about P&C policies, such as general liability, property, auto or fleet, workers’ compensation, Directors & Officers, business interruption, and umbrella? Are there others your broker recommends, based on your activities?
• When you evaluate your carrier, company ratings should reflect, at a minimum, an A.M. In fact, it’s best to have a rating of A or better. Have you checked with your agent?
• Do you take your insurance programs “to market” every three to five years to help ensure you have the best coverage at the fairest price?
• Do you know the typical exclusions and gaps under your insurance policies?
• Do you know your rights and duties under all of your policies?
• Are you familiar with the termination provisions in each of your policies—both your rights and the carrier’s rights?
• Have you confirmed that your agent(s) are aware of all of your school’s activities, including trips, summer program, athletic events, etc.? When was the last time your agents conducted a facilities audit?
• For employee benefits, do you have a procedure to report new hires and terminations in a timely manner to the appropriate insurance company?
• Are employee benefits discussed as a standard part of your onboarding and offboarding processes?

Directors and Officers Insurance

This is a liability policy protecting the school and its employees against suits of negligence. This policy should include protection for employment practices, as well as claims such as wrongful hiring and firing practices, failure to supervise, and discrimination. It should also include protection for family claims, such as failure to educate, failure to provide a safe environment, harassment, molestation, and the like.

• Have you noted the retroactive date of the policy, making certain that there are no gaps in coverage?
• Do you know what your duties are as the insured party, such as when you should report a claim or incident?
• Do you know how to report a claim or incident?
• Do you know when a claim is considered reported?
• Does your policy allow you to purchase an “extended endorsement,” providing you a longer period of time in which to report a claim or incident?
• Does your policy cover third-party and punitive damages (where allowed by law)?
• Are all of your school’s constituencies covered, from Trustees to parent volunteers?

Life Insurance

This insurance provides protection for families in the event of an employee’s untimely death or, in certain cases, total disability.

• Have you had your staff revisit their beneficiary designations recently?
• Does your plan have an “accelerated benefit” option where a portion of the death benefit will be paid in the case of a severe disability that is expected to result in death?
• Do you offer conversion or portability to departing staff as part of your offboarding process?

Section 125 Plans

A section 125 plan allows employees to pay for certain costs on a pretax basis. Allowable group insurance premiums often include those paid for medical insurance, dental insurance, vision care insurance, and term life insurance.

• If your plan offers medical reimbursement, have you remembered to offer COBRA to any staff member, terminated during the plan year, who has a positive balance?
• Have you reminded your staff of expenses incurred and submission deadlines?
• Have you conducted an annual revisit of your procedures to ensure compliance with HIPAA guidelines?
• If you work with an outside administrator, have you signed a business associate agreement?
• Have you periodically reviewed your plan document and summary plan description to ensure compliance, especially if you have or are contemplating a high-deductible plan?
• Have you made sure that certain employees W-2s reflect any dependent care deductions?

Long Term Disability

This protects employees should they be disabled and out of work for a considerable time.

• Do you know how and when to report a claim or potential claim?
• Do you know your “trigger points"?
• Do you know how easy it is to collect under your policy? Are benefits for partial disabilities available?
• Are you certain that your teacher contracts (if you use 10-month contracts) don’t create gaps in your insurance coverage?
• Do you know that if the school pays the premium, the benefits are then taxable to the employee?

Medical Insurance

This protects employees as they navigate medical and health issues.

• If you need to be, are you ACA-compliant?
• Does ADA or ADEA apply to your school? If yes, are you compliant?
• Do you know the qualifying events under COBRA?
• Have you re-visited your HIPAA-compliance policy recently?
• Have you reviewed your process for adding and removing employees?
• Have you compared your insurance invoice to ensure it matches your active, full-time employee payroll?
• Have you asked your agent to price a higher deductible plan, combined with an HRA/HSA, to see if you might save on your premium?
• If you’re a larger school, have you considered partial-self funding?

Student Accident

This protects students should they be injured in an accident, on or off campus, when participating in school-sponsored events.

• Do you know your coverage period, as some, but not all, policies are 12 months in duration?
• Do you know what sports are covered (and not covered) under your policies?
• Do you know your limits?
• Do you have catastrophic coverage? It’s often a good purchase ($1 million often for $1 per student) and risk management tool.

Ask these questions and know the answers as you review your school’s various policies and coverages.