EDUCATORS’ LEGAL LIABILITY RATING PROGRAM

(July 2024)

The Educators’ Legal Liability Policy is a non-standard line in which each insurer develops its own classification system, rates, and rating format. The classifications are commonly based on the type of educational facility.

Example: Note, this table is MERELY an illustration:
Tipikul Spechulist Casualty Classification Table
Classification Code	Type of Institution	Grade/Student Size
Class XXXX1	Schools - K through 12	Private-Under 1,000 students
Class XXXX2	Schools - K through 12	Public-1,000 to 3,000 students
Class XXXX3	Colleges and Universities	Private-Under 5,000 students
Class XXXX4	Colleges and Universities	Private-5,000 to 20,000 students
Class XXXX5	Colleges and Universities	Private-over 20,000 students
Class XXXX6	Colleges and Universities	Public-Under 10,000 students
Class XXXX7	Colleges and Universities	Public-10,000 to 25,000 students
Class XXXX8	Colleges and Universities	Public-over 25,000 students

BASE RATE FORMAT

The following is an approach used in the marketplace which is similar to the Commercial General Liability approach. The rating format is based on a combination of the number of students (full and part-time) plus faculty. A base student rate for the basic coverage is used. This rate is modified by loadings or additions for any optional endorsements and coverages selected, then multiplied by the number of full-time equivalent students. If applicable, an increased limits multiplying factor is applied.

Example:

NNNN (Class XXXXX Base Rate)

+ .nnn (Campus Security Liability Charge)

+ .nnn (Publishers Liability Charge)

NNNN (Modified Base Rate)

X .mm (Increased Limits Factor)

NNNN (Final Primary Rate)

X Number of students

NNNN Final Primary Premium

Depending on the program, a second computation may be used and added to the first. This is a base faculty rate, times the number of faculty (and possibly officers, directors, and other specified employees), times the increased limits factor.

Example:

MMMM (Class XXXXX Base Faculty Rate)

X .mm (Increased Limits Factor)

Final Faculty Rate

X Number of Faculty

NNNN (Final Secondary Premium)

+ NNNN (Final Primary Premium)

Policy Premium

The sum of the two components is the policy premium for the coverage. Individual risk credits or debits based on unique exposures or individual loss history and experience can be applied to develop the final premium. In most cases the final premium is subject to a set minimum premium.

TABLE FORMAT

Another approach is a table format, where the insurer publishes a rate table based on the classification and limit of liability. Other similarly computed premiums are added to the base charge for faculty. For each endorsement and option selected, a similar approach is taken to determine a premium to add to the base charge.

Example:
Premium Table
Classification	Limit 1	Limit 2	Limit 3	Optional Coverage
XXXX	NNNN	NNNN	NNNN	NNNN
XXXX	NNNN	NNNN	NNNN	NNNN
XXXX	NNNN	NNNN	NNNN	NNNN

Again, credits or debits based on unique exposures or individual loss history and experience are applied to the premiums. Other approaches exist. Because there is no standard coverage or rating, premium swings between insurers may be very wide. Insurance selection should not be based on price alone. A careful evaluation of what is and is not covered, as well as who is covered, is important.