How Much Liability Insurance Do Schools Need

Liability insurance safeguards your Christian school against injuries or losses related to school activities, both on and off your property.

It also provides legal defense if your school, staff, or volunteers face lawsuits.

The coverage includes defending you in court and covering court awards or settlements up to your policy limits.

Liability insurance for public schools
Do public schools have liability insurance: Photo source (Sapling)

What are Coverage Limits?

Liability limits determine the maximum amount that an insurer will pay on behalf of a school and its covered individuals if a liability claim is made.

Michael Allison, chief counsel for Brotherhood Mutual Insurance Company, encourages you to look at the following four factors when selecting liability limits:

  • The likelihood of loss
  • The school’s assets
  • The likely damages a court would award for a loss
  • The board’s “appetite for risk”

Four Factors to Consider

Consider these four factors when determining liability insurance limits, keeping in mind that it’s not an exact science.

Sufficiency of your limits depends on the specific loss details and whether a plaintiff’s attorney aims to recover more than your policy offers.

1.The likelihood of loss

Your school’s lawsuit probability depends on activity scope, participants, and risk management.

Offering numerous after-school activities with many students increases the risk of sexual abuse claims.

Implementing a strong child protection program and safety inspections can reduce losses and claim value.

While these measures can’t eliminate losses, they improve the chances of a favorable outcome.

2. The school’s assets

A plaintiff’s attorney may not pursue a liability claim beyond insurance proceeds if the school lacks significant assets.

However, in cases of clear liability, high damages, and liquid school assets, the attorney might target these assets.

More liquid assets increase the likelihood of additional claims.

If the school is associated with a church, the church’s assets may also be at risk.

3. The likely damages a court would award for a loss

Several factors influence court awards. Juries often grant higher amounts for serious injuries resulting from foreseeable losses.

The region’s judicial tendencies can also impact damages.

Consult a local attorney to understand your area’s “judicial environment.” In less favorable environments, higher awards are more likely, necessitating higher liability limits.

Prioritizing safety and implementing a robust risk management program can reduce losses and claim values for your ministry.

4. The school’s “appetite for risk”

Risk perception varies. A conservative school board may prefer higher coverage limits for peace of mind, even with limited assets.

Some schools opt for lower-cost insurance with lower limits, accepting a higher risk of exceeding those limits.

Neither choice is right or wrong; it’s about how decision-makers perceive the risk.

How to Decide?

Consulting an experienced independent agent, especially one familiar with Christian schools, is wise.

They can provide insights into necessary insurance types and how adjusting liability limits affects costs.

Additionally, they can explain the advantages of coverage for risks like employment practices liability, sexual acts liability, and directors and officers liability.

An agent knowledgeable about Christian schools can help you determine the right liability coverages and limits for your school.

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