EDUCATORS’ LEGAL LIABILITY PROGRAM OVERVIEW

(July 2024)

Educators' Legal Liability (ELL) Coverage is intended to cover loss from wrongful acts related to educational (rather than general) activities of a school, school board, school district, college, or university. It is a necessary part of any insurance or risk management protection for schools or other educational institutions. Protection is provided for loss due to the actions of officers, directors, staff, faculty, employees, volunteers, and student or substitute teachers.

Coverage Approaches

Insurers that offer this coverage have developed their own programs to fit their targeted market. Variations can be found in the Insuring Agreements, Exclusions, Conditions, and Defense provided among different policies. Coverage comparisons in this market are very difficult to perform. In analyzing programs offered by various insurers, we found two different types of programs:

Basic Form - This approach consists of a base coverage contract that addresses the minimum needs of an educational facility. Numerous exclusions within a basic contract create limited coverage. However, a wide variety of endorsements were available to buy back many of the excluded coverages. The advantage of this approach is that basic coverage could be purchased at a lower price. The disadvantage is that it could be very expensive to add any additional, needed protection.

Broad Form - This approach consists of a base contract with a great deal of coverage for education-related exposures. Since this approach contains few policy exclusions, fewer optional endorsements are available. The advantage of this approach is the wide variety of coverages included in the policy. The disadvantage is that the insured may be paying for unneeded coverage.

Non-admitted Provider

When dealing with nonstandard products, an area to evaluate is whether the insurer offering the coverage is licensed (admitted) in your state. State insurance guaranty funds do not respond to losses caused by insolvent, non-admitted insurers. If you must place the insured’s coverage with a non-admitted insurer, careful consideration should be given to the following:

· Are you familiar with and comfortable with the licensing laws and regulations for the non-admitted carrier?

· Are those laws and regulations compatible with those in your insured’s state?

· What is the quality of claims service provided by the insurer?

· What other service commitments, such as ongoing loss control, are available?

· How is the non-admitted coverage affected by an admitted insurer’s CGL policy for the same client?

POTENTIAL COVERAGE GAPS/OVERLAPS

Educators’ Legal Liability Insurance and the CGL

The coverage provided under an ELL is excluded by the CGL. The latter does not cover professional services, errors, or omissions for the operation of an educational facility. This coverage can be found only under Educators’ Legal Liability Insurance. Both policies are needed to properly cover an educational facility.

Either the ELL or the CGL should cover personal injury exposures. Ideally, the same insurer will write both policies. Having a single source for both policies would help minimize claim coordination difficulties. A claim generated by a student or faculty member can allege personal injury in addition to acts that clearly fall under either the ELL or the CGL policy.

Example: Mr. Johnson, a history teacher at Acme High School, broke up a fight between two students. He yelled at them about their behavior, then he took each by an arm. As they climbed the stairs to go to the school’s security office, one student escaped Mr. Johnson’s grip, However, he also fell down the stairs, breaking his leg. The student sued for bodily injury and for personal injury. The personal injury allegation involved Mr. Johnson’s yelling at them in front of others, causing humiliation, and unlawful detention, caused by grabbing the student by the arm.

Similarly, either the ELL or the CGL should cover personal injury and advertising injury arising from school related publications or broadcasting activities.

Example: Acme’s student newspaper publishes an article that compared Mr. Johnson’s actions in breaking up the fight to various past high-profile police brutality claims. Mr. Johnson sues for libel.

Educators’ Legal Liability Insurance and Professional Liability

The ELL covers professional liability relating to the educational activities of an institution. Other types of professional liability exposures may be excluded and require separate coverage (via an endorsement or a separate professional liability policy). Typical exposures could include medical or nursing operations, counseling, or legal services.

Example: Acme High School hires a nurse to vaccinate new students. One student suffers an allergic reaction and sues the school. The ELL would deny this claim since it was NOT related directly to the school’s core function.

In instances like the above example, it would be necessary to amend the Educators’ policy with professional liability coverage for the nurse.

Educators’ Legal Liability Insurance and Employment-related Practices Liability Insurance

Employment-related claims are routinely filed against educational institutions. This coverage is not included in most Educators’ Legal Liability insurance and is also excluded from most CGL coverages. Therefore, coverage should be purchased for this exposure.

Example: A teacher working at Highgrades University for several years sues the school for improper denial of tenure. The carrier that provides Highgrades' Educators’ Legal Liability policy sends a letter denying coverage for the incident. The policy was not endorsed to include employment-related practices liability protection.

Eligibility

Educators’ Legal Liability Insurance is a specialty coverage offered by a limited number of insurers with resources and experience in this field. Typically, an insurer provides coverage only for a specified sub-group within the broad category of educational risks.

Coverage

An ELL protects against damages from actual or alleged wrongful acts (acts, errors, or omissions of an insured). The policy can cover a variety of insureds, including members of the educational institution’s governing body, any boards, commissions, and councils, any elected or appointed official, trustee, director or superintendent, any employee, student teacher, or authorized volunteer, but coverage is limited to only when they are acting within the scope of their duties to the named insured. However, coverage is NOT provided for liability exposures related to the insured’s general operations which need to be covered by a CGL.

Educators’ Legal Liability Policies are written on a claims-made rather than on an occurrence basis.

Endorsements or Optional Coverages

While some ELL policies are very broad, others contain many exclusions. Insurers commonly offer a number of optional coverages, some which buy back coverage excluded under a basic contract.

Underwriting Considerations

Underwriting an ELL varies by carrier. Once the coverage provided by a particular insurer’s form is understood, the individual risk underwriting can begin. Many factors will come into play but as with any line of business, the starting point is always the named insured.

Rating Considerations

Educators’ Legal Liability is a non-standard coverage so each insurer has developed its own rating format, rates, rate computations and classifications. Even though a coverage is non-standard or non-admitted, all rating must still be based on the risk characteristics of the named insured being considered and cannot be viewed as arbitrary. The underwriter often has greater flexibility but normally works within a company standard.