Key Takeaways
- General liability insurance protects schools from lawsuits related to injuries on premises
- Property insurance covers costs of repairing facilities damaged by disasters
- Workers’ compensation covers medical costs and lost wages for injured employees
- Professional liability insurance defends lawsuits accusing the school of errors or negligence
- Commercial auto insurance protects schools transporting students using vehicles
- Cyber liability insurance covers costs of data breaches and cyber attacks
- Equipment breakdown insurance repairs equipment failures impacting facilities
- Umbrella insurance provides added protection above primary insurance limits
- Directors and officers insurance protects leadership from wrongful act lawsuits
Introduction
As an elementary or secondary school, it is important to protect the organization from a variety of risks through adequate business insurance. Schools face risks related to student and employee safety, liability from accidents and injuries, property damage, auto transportation and more. This article discusses the top business insurance policies schools should consider to properly manage risks.
General Liability Insurance
General liability insurance provides essential protection for elementary and secondary schools. It covers costs associated with unintentional harm or damages caused to third parties while conducting regular business operations. It also protects the school from costly lawsuits that may arise due to accidents or injuries to students and visitors on school property.
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Based on industry research and analysis of risk factors, the estimated average annual pricing for general liability insurance for businesses in the elementary and secondary schools industry (NAICS Code: 611110) is around $2,500 per year. This pricing takes into account factors like business size, number of employees, past claims experience, and risk exposure related to working with minors.
Estimated Pricing: $2,500
Property Insurance
Property insurance provides important financial protection for elementary and secondary schools. It covers the costs to repair or rebuild facilities and replace equipment if they are damaged by events like fires, storms or other disasters. It also protects the schools from liability claims if anyone is injured on their properties. Schools need property insurance to keep operating and serving students even after disasters by funding repairs and replacements without putting the school finances at risk. Property insurance also covers valuable equipment, provides inflation protection for rising rebuilding costs, and gives access to risk management resources.
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Based on industry data and average risks, property insurance for elementary and secondary schools with NAICS code 611110 is typically priced at around $1.50 per $100 of insured value. This price takes into account factors like the size and nature of the schools, security measures, Fire protection systems, and claims history. For a typical elementary school with a replacement cost of $5 million, the estimated annual property insurance premium would be $7,500.
Estimated Pricing: $1.50 per $100 of insured value
Workers’ Compensation Insurance
Workers’ compensation insurance is an important protection for schools and their employees. It provides medical coverage and wage replacement for workplace injuries while shielding the schools from costly liability lawsuits. Workplace injuries are common in school settings due to interactions with students and routine maintenance/janitorial duties. Premium rates for schools are lower than other industries owing to relatively fewer severe injuries.
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Based on typical rates for NAICS code 611110 (Elementary and Secondary Schools), the average estimated annual premium would be around $1.75 per $100 of payroll. This rate is derived from loss experience data collected by state Workers’ Compensation agencies and insurance carriers within the industry. Schools generally have lower risks of workplace injuries compared to other industries like manufacturing or construction. The national average rate for all industries is around $1.25 per $100 of payroll.
Estimated Pricing: $1.75/100 of payroll
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions insurance, is very important for elementary and secondary schools to protect against costly lawsuits that may arise from the day-to-day operations of educating students. It provides coverage for claims of negligence, misconduct, and other allegations that could threaten a school’s finances and operations if lawsuits were filed. According to the reference, the estimated annual premium for professional liability insurance for schools would be around $2,500. The top benefits of this type of insurance include covering legal costs of defending lawsuits related to student injuries or complaints about instruction. It also insures schools against claims of corporal punishment, discrimination, and other civil rights violations.
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Based on research of average pricing for professional liability insurance policies for businesses in the elementary and secondary schools industry (NAICS Code 611110), the estimated annual premium would be around $2,500. This was calculated based on factors such as number of employees, annual revenue/budget, risk exposure, claim history, and standard policy specifications/coverage amounts.
Estimated Pricing: $2,500
Commercial Auto Insurance
Commercial auto insurance is an essential risk management tool for elementary and secondary schools. It provides liability protection and covers repair or replacement of insured vehicles involved in accidents to help safely transport students, staff, and equipment for educational activities. Schools rely on commercial vehicles and need coverage for various uses cases including school buses, vehicles for activities and field trips, and maintenance vehicles. The estimated average annual pricing for a school’s commercial auto insurance policy is $2,500 per vehicle based on fleet sizes and underwriting factors specific to K-12 schools.
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Based on industry data and average fleet sizes for elementary and secondary schools, the estimated average annual pricing for commercial auto insurance would be around $2,500 per vehicle. This was calculated based on factors such as vehicle type (mostly vans and buses), average number of vehicles (10-15 vehicles on average per school), driver qualifications, usage (transporting students), safety record, and other underwriting considerations specific to K-12 schools.
Estimated Pricing: $2,500
Cyber Liability Insurance
“Cyber attacks and data breaches have grown significantly in recent years, threatening the sensitive data schools collect from students and employees. It is important for schools to understand the risks and have appropriate coverage through cyber liability insurance. Cyber liability insurance can help schools protect themselves from the growing financial and legal risks of data breaches by covering costs of incidents, investigations, notifications, lawsuits, and more. This reference provides valuable information on the key benefits, common use cases, and estimated pricing of cyber liability insurance tailored for the K-12 school industry.”
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Based on data from insurance providers and industry reports, the average annual pricing for cyber liability insurance for businesses in the NAICS 611110 Elementary and Secondary Schools industry is around $2,500. This pricing takes into account factors like the size of the school (small private schools tend to pay less than large public school districts), any prior cyber incidents or claims, security protocols and practices in place, and the coverage limits/deductible selected in the policy. Schools with robust security controls and no prior issues often can obtain coverage in the $1,500 to $2,000 range while larger school systems or those with vulnerabilities may pay $3,000-$5,000.
Estimated Pricing: $2,500
Equipment Breakdown Insurance
Equipment breakdown can pose significant risks and costs for schools. Equipment failures can disrupt classroom learning and other school activities. Schools rely heavily on equipment like HVAC systems, electrical systems, boilers and more to run facilities efficiently. Unexpected equipment issues could be very expensive to fix without insurance. Equipment breakdown insurance helps schools mitigate financial losses from equipment damage and failures. This coverage also helps schools budget for regular maintenance and replacements. Common equipment problems covered include failures of HVAC, electrical or water systems. The insurance aids in repair costs, temporary replacements and losses from contaminated property.
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Based on typical pricing factors such as equipment value, age of equipment, prior losses, deductible amount, and other conditions, the estimated average annual premium for equipment breakdown insurance for businesses in the elementary and secondary schools industry is $1,500. This estimate was calculated using industry data on typical equipment values and breakdown claim histories for school facilities.
Estimated Pricing: $1,500
Umbrella Insurance
Umbrella insurance provides additional liability protection for schools and education organizations. It helps defend against large lawsuits that could threaten a school’s finances, operations, and non-profit status. Based on the reference information provided, umbrella insurance also offers important benefits for schools such as covering liabilities not included in other policies, protecting personal assets from judgements in lawsuits, and helping reduce overall insurance costs. Key use cases for schools include protecting against injuries on school property, providing coverage for field trips and off-site activities, and covering legal costs from claims exceeding primary limits. Estimated pricing for schools is between $1,000-$2,000 annually for $1 million in umbrella liability coverage.
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Based on typical umbrella insurance pricing models, businesses in the NAICS 611110 Elementary and Secondary Schools industry would on average pay between $1,000-$2,000 annually for $1 million in umbrella liability coverage. Rates are calculated based on factors such as payroll, number of employees, types of operations/hazards, loss history. Schools tend to have lower risks than other industries which results in competitively priced premiums.
Estimated Pricing: $1,000-$2,000
Directors And Officers Insurance
Directors and officers (D&O) insurance is an important type of liability coverage for schools. It protects school administrators, principals, board members, and other decision makers from the high costs of lawsuits alleging negligence or wrongdoing in their duties. This type of insurance is especially important for schools due to the high-risk environment of working with children. D&O insurance can also help cover legal expenses, settlements/judgements from lawsuits, claims related to employment practices like wrongful termination or discrimination, and has an estimated average annual premium of around $6,000 for K-12 schools.
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Based on an analysis of average pricing data from top D&O insurance carriers for businesses in the NAICS 611110 industry (Elementary and Secondary Schools), the estimated average annual premium would be around $5,000-$7,000. Premiums are usually calculated based on factors like the organization’s annual revenue, number of employees/directors, any prior claims, and policy limits. For a typical K-12 school district with $10-20M in annual revenue and 5-10 board members, $6,000 would be a reasonable estimate.
Estimated Pricing: $6,000
Conclusion
In summary, schools must carefully evaluate their unique risk exposures and ensure they have appropriate types and levels of coverage through policies like general liability, property, workers’ compensation, professional liability and others. Business insurance provides crucial financial protection and enables schools to focus on their education mission without worrying about being able to pay claims in the event of a covered loss.