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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: john.siffert@marshmma.com

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: kerry.leider@marshmma.com

Questions & Considerations