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Kerry Leider
Risk Management Consultant, Property and Casualty
Marsh & McLennan Agency
7225 Northland Drive North │ Suite 300 │ Minneapolis, MN 55428
John Siffert
Risk Management Consultant, Property and Casualty
Marsh & McLennan Agency
7225 Northland Drive North │ Suite 300 │ Minneapolis, MN 55428
MASBO Fall Conference
November 3, 2017
Insurance Limits and Deductibles – What’s In Your Policies?
Changes in the District
School Board Dynamics
Human Resources Transportation Vehicles
Annual Renewal Assessment
Property Value Instructional & Academic
Emerging Risks
Administrators & Staff Market Conditions
2017- 2018: INSURANCE PROPOSAL
Package Coverage – Carrier’s Proposal
COVERAGE LIMITS - DEDUCTIBLE
PROPERTY
Blanket Buildings, Personal Property and In Open $48,593,703
Deductible $5,000
Blanket Business Income & Extra Expense $125,000
$1,000,000
Earthquake $100,000
Flood $100,000
Building Ordinance
- Undamaged Portion
- Demolition
- Increase Cost of Const.
Policy Limit
$250,000
$250,000
INLAND MARINE
Musical Instruments $187,000
Band Uniforms $50,000
Scheduled Equipment $48,719
Commercial Articles-Audio Visual $159,000
Athletic Equipment $50,000
Fine Arts $50,000
Dwellings Under Construction $100,000
Computers (EDP) $1,090,000
Data Compromise $100,000
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2017- 2018: INSURANCE PROPOSAL
Package Coverage – Carrier’s Proposal
COVERAGE LIMITS - DEDUCTIBLES
GENERAL LIABILITY
Each Occurrence $1,000,000
Aggregate $2,000,000
Fire Damage Liability $300,000
Medical Payment (excludes students) $15,000
Employee Benefit Liability $1M/$3M
Sexual Misconduct $1,000,000
Innocent Party Response $300,000
Violent Event Response
- Each Person Limit Loss
- Each Violent Event Limit
- Aggregate Limit
$25,000
$300,000
$300,000
CRIME
Employee Dishonesty $100,000
Forgery or Alterations $100,000
Money & Securities $50,000
Computer Fraud $100,000
Deductible $500
2017- 2018: INSURANCE PROPOSAL
Package Coverage – Carrier’s Proposal
COVERAGE LIMITS - DEDUCTIBLEs
SCHOOL LEADERS LEGAL
Limit of Liability
- Per Claim
- Aggregate
$1,000,000
$1,000,000
Non-Monetary Relief Defense $100,000
Deductible per claim $5,000
AUTOMOBILE
Comprehensive Ded. $500
Collision Ded. $1,000
UMBRELLA
Limit of Liability $1,000,000
Self-Insured Retention $0
LOC. # OCCUPANCY ADDRESS BUILDING BUSINESS
PERSONAL
PROPERTY
PROPERTY IN
OPEN
BUSINESS INC. &
EXTRA EXP.
001-001 HS/MID School 100 North Ave , ANY Town, MN 50000 $ 48,000,90
0
$ 5,099,000 $ 125,000
001-002 Property in the Open $ 180,000
001-003 Grounds Storage - North $ 50,000 $ 19,000
001-004 Grounds Storage - South $ 50,000 $ 15,000
001-005 Consession/Rest Room BLDG $ 66,100 $ 5,000
001-006 Athletic Storage - Track Shed $ 18,000 $ 12,000
001-007 Football Storage - Ticket Booth $ 39,000 $ 19,000
002-001 Bus Garage 1110 South Ave , ANY Town, MN 50000 $ 475,000 $ 109,000
002-002 Bus Cold Storage $ 350,000 $ 12,000
002-003 ALC $ - $ 51,900
003-001 Elementry School 170 West Road, ANY Town, MN 50000 $ 149,000 $ 31,000
003-002 Property in the Open $ 10,900
003-003 Special Ed. Self Help Ctr. $ 50,900 $ 3,900
003-004 Property in the Open $ 1,500
004-001 Football Press Box Touchdown Street NW, ANY Town, MN
50000
$ 90,000 $
004-002 Property in the Open $ 555,000
YOUR Public Schools
2017 to 2018 STATEMENT OF VALUES & LOCATION SCHEDULE
TOTAL $49,338,900 $5,376,800 $747,400 125000
Blanket Total * $55,463,100
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Annual Review and Assessment
• Maintain List of new and changing
• Maintain accurate property values
• Replacement Values
• Account for inflation
• Construction market conditions
• Gaps in coverage
• Who provides you this information
• Appraisal
Ask your agent for suggestions and ideas.
• Consider Premium Basis
• Property Values • Building Contents • Enrollment by grade • Teachers • Total of employees by classification • Foreign Trip • Special curriculum (Rifle or Archery Range) • Special Education Practices and Programs • Auto / Drivers • Carrier Specific Supplemental Requests
Annual Review and Assessment
• Appraisals
• Values at replacement cost • Updated every 2-3 years
• Value of departmental equipment
• Musical • Technology
• Are your foundations covered
• Appraisal exclusions?
Annual Review and Assessment
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• Maintain database of typical carrier
required information.
• Work with your agent to obtain copies of
carrier required supplemental information
• Standard Rating data ( Loss Runs)
• Type of Construction
• Location of Fire Department & Water
Annual Review and Assessment
• 4 - Basic Liability Policies
• Educators Legal Liability (School Leaders)
• General Liability
• Umbrella/Excess Liability
• Commercial Auto Liability
Anatomy of Liability Insurance
• Common Policy Sections
• Coverages • Exclusions • Supplementary Payments • Who is Insured • Limits • Conditions • Definitions
Anatomy of Liability Insurance
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• Common / Usual Exclusions
• Intentional Injury • Contractual • Work Comp. • Employers Liability • Pollution • War • Terrorism
Anatomy of Liability Insurance
• Supplementary Payments
• Cost of defending an indemnitee will not reduce the policy limit. (Defense outside of policy limits?)
• OTHERS
Anatomy of Liability Insurance
• Who is Insured
• Your District
• Your Board members, Administrators, employees, volunteers • Property Managers ? • Permissive users of an auto (commercial auto policy)
Anatomy of Liability Insurance
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• Conditions Section
• Outlines the responsibilities of both the insured and insurer • Reporting of claims • If more that one policy applies • Law suits filed against the insurer • Audits • Cancellation Provisions, Ect.
Anatomy of Liability Insurance
• Liability Insurance – Provides protection for:
• Civil Torts • Unintentional Injury to third parties • Resulting from negligence • Contractual liability • Negligence is not required for Medical Payments coverage.
Anatomy of Liability Insurance
• Usually written claims made basis
• What is covered
• School Board, Directors & officers
• Employment Practices
• Educators Errors and omissions
• Media Liability
Educators Legal Liability
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Educators Legal Liability
• Directors and Officers • Losses caused by financial mismanagement • Improprieties associated with fund raising • Negligent management of endowment funds • Antitrust claims
• Employment practices • Wrongful termination • Failure to hire • Failure to promote • Denial of tenure • Discrimination
Educators Legal Liability
• Educators errors & omissions • Failure to educate • Negligent career or academic counseling • Wrongful dismissal on academic/disciplinary • Discrimination in financial aid grants • Sexual Harassment • Non-monetary Defense
• Media • Infringement of Copyright • Infringement of trademark • Plagiarism • Libel
• Purpose – Provides coverage for catastrophic events
• Umbrella – to extend limits of primary liability policies.
• Excess – Replace primary coverage once the primary limits
have been exhausted.
• Unique to Umbrella – to afford broader coverage (for some risks) than primary policies provide subject to a retention amount (second deductible).
Umbrella/Excess Liability
Connecting it all together
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• But – MN has Tort Caps so why UL/Excess
• Tort caps do not apply to claims brought outside of the MN court system.
• Do school representatives travel outside the state?
• Is it possible you might hire a contractor from out
of state?
• Cases brought under Federal Law?
Umbrella/Excess Liability
Connecting it all together
Ways to Cut Cost
?
Property Valuation
Property Deductibles
Inland Marine
Crime
Liability
Automobile
School Leaders Legal Liability
Good Insurance Companies
Good Insurance Agent
Ways to Cut Costs
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Property Valuation
Co-insurance –taking on more risk
80%
90%
100%
Agreed Amount
Ways to Cut Costs
Ways to Cut Costs
Property Deductibles
Taking on Part of Loss
• $2,500
• $5,000
• $10,000
• $50,000
Flood/Earthquake
Inland Marine
Why place risk under here
Limit Exposure
Mobility of asset
Change in deductible
$250
$500
$1,000
Ways to Cut Costs
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Crime
Drivers of risk
Employee Dishonesty
Forgery
Money & Securities
Taking on more risk
Casinos
$250 and $500 deductible
Ways to Cut Costs
Liability
Statutory Caps
$1.5M per occurrence
Out of State Claims?
Deductible
Limit Exposure
Certificate of Insurance
• Equal to State Cap or more
Ways to Cut Costs
Automobile
Change in deductible
$250
$500
$1,000
Glass Coverage ?
Ways to Cut Costs
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School Leaders Legal Liability
Limited by State Statute
Non-monetary defense
Timely reporting
Application of Deductible
Defense in addition to Liability Limit
Ways to Cut Costs
Umbrella
Excess Liability over other lines
Satisfy Statutory Compliance
Deductible / Retention?
Effects of multiple companies
And their financial strength
Ways to Cut Costs
Good Insurance Companies
Fast Service and Responsive
Stable and Solid Rated
Loss prevention program
Promotes a culture of safety
Ways to Cut Costs
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Good Insurance Agent
Represents your interest - Trusted
Appointed with all the School Carriers
Seeks full market competition
Strong knowledge of school Culture Environment Challenges
Consistent High Level of Service
Ways to Cut Costs
• Drone Liability
• Builders Risk
• Cyber/Security
• International/Travel and accident
• TULIP –Building lease or use by others
• Opioids
Separate limits or sub limits
Emerging Risks
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•This document and any recommendations, analysis or advice provided by representatives of Marsh & McLennan Agency during its presentation are intended solely for the participants of
this workshop . Any statements concerning accounting, financial, or legal matters are based solely on our experience as insurance agents or brokers , risk consultants and general subject
advisors, and are not to be relied upon as accounting , financial or legal advice for which you should consult your own professional advisors in these areas as circumstances surrounding this
subject matter varies. The information contained herein is based on sources we believe reliable, but we make no representation or warrantee as to its accuracy and Marsh & McLennan Agency
have no obligation to update these materials, or any liability to you or any other party with regard to these published or presented materials and information.
•Copyright 2017 Marsh & McLennan Agency LLC
John Siffert, CSRM
Risk Management Consultant, Property and Casualty
Marsh & McLennan Agency
7225 Northland Drive North │ Suite 300 │ Minneapolis, MN 55428
PHONE: 763-548-8816 email: [email protected]
Kerry Leider, CSRM
Risk Management Consultant, Property and Casualty
Marsh & McLennan Agency
1502 London Road│ Suite 210 │ Duluth, MN 55812
PHONE: 218-343-2894 email: [email protected]
Questions & Considerations