Students, Accidents, and Your School’s Liability
Vol. 2 No. 5
Accidental injuries to students participating in school-related activities—both sport and non-sport related—are certainly nothing new. However, with increasing coverage “gaps” in the form of co-pays and higher deductibles found in more and more traditional health plans, out- of-pocket losses are on the rise. So too, unfortunately, is the increase in the number of “3rd- party (parent) lawsuits holding schools more and more responsible for their actions. Accordingly, schools need to be increasingly aware of their liability in this area.
The following reflects the most common types of claims or charges:
In addition to having a robust injury prevention plan as part of your overall risk management protocol (always the best approach), one way to reduce your ultimate risk, in this area, is to purchase student accident insurance. With this coverage, you can insure virtually all of your student’s activities.
As your school adds activities that may impose greater risks, you may assume the risk or transfer risk through the purchase of the following insurance programs. Your options include:
- Self-insurance. We usually don’t recommend this approach for schools. However, self-insuring may be an option for a school with an historically and “predictably” low-incident rate, as well as, no “hazardous” activities. It is important to budget for such an expense and have staff available to administer the program. Designate someone at the school to coordinate benefits with the families’ insurance, as well as to pay a medical provider or a parent for “eligible” bills. If self-insuring, however, be mindful of possible HIPAA issues and claims of discrimination.
- Optional or voluntary coverage. Optional programs are offered through the school but are not paid for by the school. They are available by individual contract with families electing to purchase coverage for their children. Schools choosing this plan will typically have a low number of participants in the plan and this approach does not provide a strong risk management position for the school.
- Mandatory coverage. Mandatory programs will cover the entire student population. Since the entire student body is covered, carriers typically offer lower rates per student for this approach than for voluntary. These programs are via a contract between the school and insurance company. The cost of the premium may be built into students’ tuition, passed directly on to the parent, or paid for by the school. Premiums are remitted by the school to the insurance company.
- Catastrophic coverage. Typically, the greatest areas of exposure for catastrophic injuries are interscholastic contact sports (football), automobile accidents, and trips in general. Catastrophic accident coverage is typically available on a mandatory basis. This coverage, which can supplement an underlying plan or be a stand alone, can protect your students with medical benefits ranging from $1 million to $5 million. Catastrophic coverage may be mandated by your school's liability carrier or by an association your school has joined, such as a state athletic association.
- Special risk coverage. Insurance is available for your school's special programs ranging from a one-day event or a single event such as a weekend soccer tournament to international travel. Schools may choose special risk insurance to supplement their own basic policies as well as parents’ coverage. Whatever your approach, it is always a good idea to inform your agent of both current and any proposed activities, as these may impact other polices such as Bodily Injury coverage under General liability.