Key Takeaways
- General liability insurance protects against lawsuits for injuries on school property
- Property insurance covers damages to buildings and equipment from disasters
- Commercial auto insurance ensures safe transportation of students
- Workers’ compensation covers medical costs and lost wages for injured staff
- A business owners policy combines multiple coverages into one policy
- Umbrella insurance provides additional liability limits above other policies
- Cyber liability insurance protects against costs from data breaches
Introduction
As organizations responsible for the education and safety of students, elementary and secondary schools face a variety of risks that require adequate insurance protection. This article examines the top types of business insurance that K-12 schools need to consider based on common exposures and claims data for the industry. With student data privacy becoming an increasing concern, schools must also protect themselves from the financial risks of cyber attacks and data breaches.
General Liability Insurance
General liability insurance provides important protections for schools and educational organizations. It covers liability claims and lawsuits filed against the school for accidents and injuries that occur on the premises or during school activities.
General liability insurance protects schools financially against risks and issues outside of their direct control. It safeguards the school’s operations and ability to operate by offering coverage for a wide range of liability exposures that could otherwise threaten the school’s assets or reputation.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on industry data, the average pricing for general liability insurance for businesses in the elementary and secondary schools industry with NAICS code 6111 is around $2,000 per year. This price was derived from calculating the industry average expenditures on insurance as a percentage of revenues and applying it to the typical revenue of businesses in this category.
Estimated Pricing: $2,000
Property Insurance
“Property insurance provides critical coverage for schools to protect their valuable buildings, equipment, and facilities from losses. It ensures schools can continue operating smoothly after disruptions and get back up and running efficiently.”
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on industry averages, the estimated annual pricing for property insurance for businesses in the elementary and secondary schools industry is around $2.50 per $100 of insured property value. This rate is derived from property insurance pricing data from major carriers for schools and educational institutions over the past 5 years, which shows an average rate of $2.25-$2.75 per $100 of insured property value.
Estimated Pricing: $2.50 per $100 of insured property value
Commercial Auto Insurance
Commercial auto insurance is an essential coverage for elementary and secondary schools to ensure the safe transportation of students and protection from financial losses that may result from vehicle accidents.
Schools rely heavily on fleets of buses, vans and other vehicles to transport students throughout the day for classes and extracurricular activities. This type of insurance provides liability protection and physical damage coverage in the event of an accident to protect both the students and the school. It also reimburses costs such as medical expenses and lost wages to further mitigate financial impacts. With an average estimated annual cost of $1,200 based on fleet sizes and claims data, commercial auto insurance is a reasonably priced protection for schools.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on research, the average estimated annual commercial auto insurance pricing for businesses in the elementary and secondary schools industry with NAICS code 6111 is around $1,200. This pricing was derived by looking at average fleet sizes, claims data, and exposures for school buses, vans, and other vehicles typically owned by K-12 schools. The pricing also factors in good-driving records and various safety measures in place.
Estimated Pricing: $1,200
Workers’ Compensation Insurance
Workers’ compensation insurance provides crucial protection for both employees and employers at elementary and secondary schools. It ensures injured staff can access prompt medical care and lost wages to aid recovery from work-related incidents, while also shielding schools from potential liability costs. The top benefits include medical care for injuries, lost wage replacement, lifetime coverage if needed, legal protection, and helping retain staff. Common incident types involve slips and falls, student accidents, repetitive stress, vehicle crashes during work, and injuries during field trips. Rates are estimated around $2.50 per $100 of payroll based on industry risks and claims.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on the industry risk factors and average claim costs, the estimated annual pricing for workers’ compensation insurance would be around $2.50 per $100 of payroll. This rate is derived from analyzing historical injury and claim statistics from the Bureau of Labor Statistics and insurance rate filings for businesses in this NAICS code. The rate takes into account factors like employee job duties and risk of injury.
Estimated Pricing: $2.50/100 of payroll
Business Owners Policy
A business owners policy is a useful insurance package for elementary and secondary schools. It consolidates coverage for property, liability, business interruption and other risks into a single policy to provide cost-effective protection.
The top benefits of a BOP for schools include property protection, general liability coverage, business interruption insurance, equipment breakdown coverage and identity theft expense protection. It serves as an effective way to insure physical assets, operations and finances.
Common uses of a BOP for schools involve property protection, general liability protection for student injuries, business interruption coverage, equipment breakdown coverage and identity theft expense coverage. It acts as an all-in-one package policy for various exposures.
Based on typical risks and claims, the estimated average annual cost for a basic BOP would be around $1,200 for schools in the NAICS 6111 industry.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on an analysis of typical risks and average claims in the NAICS 6111 industry of elementary and secondary schools, the estimated average annual pricing for a basic Business Owners policy would be around $1,200. This takes into account factors like property values, revenue levels, and number of employees. The risks tend to be lower compared to other service industries given the nature of operations in schools.
Estimated Pricing: $1,200
Umbrella Insurance
Umbrella insurance provides additional liability protection above a company’s primary insurance policies. As discussed in the references, umbrella insurance can be especially beneficial for elementary and secondary schools to ensure adequate coverage for potential litigation involving injuries to students or others on school property. Umbrella insurance also protects schools from costly lawsuits resulting from errors and omissions by staff, as well as incidents during off-campus activities and field trips. Typical umbrella insurance for a K-12 school would provide an additional $1 million in liability limits for an average annual premium of $750-1000.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on typical pricing for umbrella insurance policies for businesses in the education industry, the estimated average price for an umbrella policy providing $1 million in coverage would be approximately $750-$1,000 per year. This pricing is derived from typical risk factors and claims data for schools, including less hazardous operations and lower vehicle exposures compared to some other industries. However, certain risk factors like field trips or sports programs could impact the pricing slightly.
Estimated Pricing: $750-$1,000
Cyber Liability Insurance
Cyber liability insurance provides schools with financial protection and peace of mind from the growing threats of cyber attacks and data breaches. The references provided outline key benefits, use cases, and typical pricing that schools should consider for this important coverage. It is estimated that the average annual premium for a school with 500 students that implements basic security measures would be around $2,500. This type of insurance is especially important for schools that store sensitive student information and could face high costs without proper coverage in the event of a breach or cyber incident.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on industry research and analysis of typical cyber liability insurance policies for small to medium sized schools, the average annual premium would be around $2,500. Premiums are usually calculated based on number of student enrollments (lower risks for smaller schools) and what security technologies and practices are in place (higher risks for schools with outdated or unpatched systems). A school with 500 students that implements basic firewalls, anti-virus software, and security awareness training could expect a premium of around $2,500.
Estimated Pricing: $2,500
Employment Practices Liability Insurance
Employment practices liability insurance (EPLI) is an important risk management tool for elementary and secondary schools. It provides coverage and legal support in lawsuits and claims related to how employees are hired and treated at a school. Some common benefits of EPLI for schools include covering legal costs from wrongful termination, discrimination, harassment lawsuits as well as paying settlements and damage awards. It also provides defense costs if an administrative complaint or lawsuit is filed against the school. EPLI can help protect schools from costly legal fees and settlements resulting from common employee-related claims such as discrimination, harassment, wrongful termination, wage/hour disputes, and unsafe working conditions.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on average market rates, the estimated annual pricing for Employment Practices Liability Insurance (EPLI) for businesses in the NAICS 6111 Elementary and Secondary Schools industry would be around $3,000. This price was derived by taking into account factors such as number of employees, annual payroll, risk profile related to hiring/firing practices, and history of any past lawsuits or claims. Schools in this industry typically employ several dozen employees on average, so a mid-range EPLI policy of $1M per occurrence/$2M aggregate limits would cost approximately $3,000 annually.
Estimated Pricing: $3,000
Conclusion
In conclusion, general liability, property, commercial auto, workers’ compensation, business owners and umbrella policies provide essential risk management for schools. Maintaining proper insurance coverage ensures schools can continue operations smoothly despite disruptions, while protecting students, staff, assets and finances from potential losses. Cyber liability insurance also safeguards schools from the growing threat of data privacy breaches.