The best form of Directors & Officers “insurance” is to not have the incident, loss, or suit happen in the first place. The second-best form of protection is of course to reduce your chances of incidents happening. Risk management, or claims management, is critical to accomplishing this end.
Going beyond insurance, training and education are examples of key elements in the risk management process. Topics for training faculty and staff should include harassment/misconduct, hiring and firing, how and when to conduct job evaluations, dispute resolution, handling disciplinary issues (both employee and student), and the like.
Another approach to controlling exposure in this complex area, and one which clearly has additional positive and significant outcomes extending far beyond this topic, is to strive to create a culture of caring, support, and predictability by having a written (and followed) employee handbook. This document should have clear protocols for various situations. So, too, can a parent/student contract help to reduce “surprises” and unmet expectations and, therefore, claims.
That all said, the following list represents a few of the most important risks or exposures you have as a school and, should be certain are covered in your policy.
- Employment Practices Liability including wrongful termination, wrongful hiring, discrimination, harassment, and misrepresentation
- Entity coverage (should the school be sued)
- Duty to defend
- Defense costs in addition to the limits
- Right to settle or not settle
- Punitive damages (where allowed by state)
- Third-party discrimination for non-employees
- Sexual misconduct coverage/workplace violence coverage
- Internet liability coverage/fiduciary coverage
- Educational wrongful acts coverage (breach of contract)
Remember, as a school leader, D&O insurance MAY be the most critical insurance and protection you provide to your school, but you do not have to “go it alone.”
It is your agent’s job to help you to know and think about all of this. Contact her/him, and/or your insurance company, as you work through this process. Have them sit with you to review your policy so that you can ask questions and fully know what is and is not covered!
