It's Time to Think About Insurance

This is the time of year when we need to begin examining our plans for the coming fiscal year for both our property and casualty insurance. We also need to consider our agent status, our goals with our insurance, the cost structure vs. stability of our insurer and reinsurer and what we are actually insuring. Insurance for a school district or LEA is a many faceted thing.  

If you are considering changing your agent or your carrier, do it now--do not wait. It will take several months worth of paperwork and effort to change to a new carrier, and you want that done correctly. Don’t let the effort involved dissuade you from changing carriers; if there is a financial issue with your carrier, RUN don't walk to a financially viable carrier. You need to understand what the ramifications are if your insurance doesn't have sufficient revenue to continue, and you also need to understand what the notification procedure will be in this particular case.

No matter your status with your carrier, it is important that you evaluate what you actually have insured. Do you really know what the replacement value per square foot your school structures are insured for? Is it a 100% coverage? A 75% coverage? When does the initial insurance group leave the picture and the reinsurer take over? The secondary status on your risk is to know what is actually covered and how it's covered.  

Let’s remember that commercial insurance is not like your homeowner’s policy; it’s insurance, but lots of claims will drive up your cost and may make you uninsurable if you aren't cautious. You and your agent need to have these discussions, and you need to be comfortable in your understanding. Your board also needs to understand what your insurance looks like and be comfortable with where your insurance lies. Remember, insurance is designed to make you whole not to make you money.  

Finally, we need to examine our liability insurance, surety bonds and our board’s insurance. We recommend board training at least once a year on what insurance will and will not protect the board finances and personal liability from. I have always heard people say, “That’s why I have insurance.” While that is a noble sentiment and allows us to charge the walls of complacency and fear, remember if you act outside your contract, you have just become liable for the issue you've created with no insurance coverage. Board members as well as employees need to understand this line and have an ethical set of discussion points to work through this set of parameters.  

If we can help in any manner please don’t hesitate to contact us.