Understand what your various insurance policies include…and what they don’t
Do You Know Your Risk Exposure
In recent years, incidents of campus violence have become a growing concern for educational institutions worldwide. From active shooter situations to sexual assaults and acts of aggression among students, faculty, and staff, the landscape of campus safety is continually evolving. Considering these challenges, it is imperative for educational institutions to not only prioritize comprehensive safety measures but also to understand the risk exposure and insurance considerations surrounding such incidents.
Understanding the Institution’s Exposure to Liability for Campus Violence
Incidents of campus violence pose a wide variety of risks for educational institutions. For example, third parties may sue the institution for bodily injury or emotional distress. Educational institutions can be held liable for these damages through various legal causes of action. For example:
- Negligence: Institutions can be held liable for negligence if they fail to take reasonable steps to prevent foreseeable harm on their campuses, including implementing inadequate security measures, failing to respond appropriately to reports of threatening behavior, or failing to warn of specific known threats.
- Inadequate Policies and Procedures: If an institution lacks clear policies and procedures for preventing and responding to campus violence, or if existing policies are not effectively implemented, they may be found liable for resulting harm.
- Criminal Liability: In cases of gross negligence or intentional misconduct, individuals within the institution, such as administrators or security personnel, may also face criminal charges.
The institution may also incur first-party damages, such as damage to buildings and property, loss of revenue, and reputational damage.
Understanding What Is Covered Under the Institution’s Insurance Policies
CGL Insurance
All universities and institutions of higher learning have a commercial general liability (CGL) insurance policy. Generally, a CGL policy will cover bodily injury or property damage caused by an “occurrence,” with most policies defining an occurrence as an “accident.”
Claims of an institution’s negligent failure to prevent a campus violence event would likely qualify as an “accident.” However, educational institutions must be aware of potentially applicable exclusions in the CGL policy. For example, a CGL policy may have an “expected or intended” exclusion, which excludes coverage for damages expected or intended from the standpoint of the insured. So, for an insurer to invoke this exclusion, it must prove that the insured (e.g., the university or its employees) expected or intended the damages that resulted from the act of violence, not the act of violence itself.
Some CGL policies also have an exclusion for any claim involving a firearm. It may not matter that the insured was not the owner or user of the firearm; the mere fact that a firearm was involved in bringing about the damage may be enough to trigger the exclusion.
D&O and E&O Insurance
Directors and Officers (D&O) and Errors and Omissions (E&O) policies are designed to protect a board of directors, trustees, administrators and officers, faculty, and other professional employees of an institution. These policies provide coverage for claims for a “wrongful act,” which is broadly defined to include any actual or alleged error, omission, act, misstatement, neglect, or breach of duty. However, these policies typically exclude coverage for losses arising out of bodily injury, death, mental injury, or emotional distress from causes such as assault and battery, sexual harassment, rape, or molestation, negligent hiring, training, retention or supervision of employees, or negligent supervision of students.
Commercial Property Insurance
Commercial property insurance covers direct physical loss or damage to covered property caused by a covered peril, which typically includes all risks of loss except those excluded by the policy. In the context of campus violence, a commercial property policy would likely cover property damage such as the repair of bullet holes, broken windows, broken doors, and other types of physical damage. However, a commercial property policy would most likely not cover the cost of structural improvements or improved security features because most policies only cover the cost to restore a property to its pre-loss state.
Further, these policies would not cover the cost of demolishing and rebuilding a school building that was not physically damaged. For example, after the Sandy Hook massacre, the school building was demolished, and a new Sandy Hook Elementary building was built with additional safety features such as video monitoring and impact-resistant windows. A commercial property policy would not cover this type of expense.
Deadly Weapons Insurance
In addition to the traditional forms of insurance above, which provide protection for certain risks posed by campus violence incidents, some insurers offer standalone coverage for risks posed by deadly weapons. These policies may include coverage for first-party damage and third-party liability, as well as risk prevention and crisis management services.
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