SEPTEMBER 09, 2020 07:41 AM (EDT)
Best’s Commentary: Insurance Liability Moves to the Head of the Class as School Year Begins
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OLDWICK - SEPTEMBER 09, 2020 07:41 AM (EDT)
The academic year for schools across United States promises to be like no other, as the COVID-19 pandemic has forced school systems to re-evaluate most every aspect of operations, including their potential liabilities and insurance coverage, according to a new AM Best report.
A Best’s Commentary, titled, “Insurance Liability at the Forefront as School Year Begins,” notes that school boards and administrators across the country are contemplating whether a school can be held legally liable if students, staff or others contract COVID-19. The end result may leave school-focused insurers facing an onslaught of litigation, with the potential for significant expenses and losses.
While schools are typically protected by some form of a governmental or public entity tort immunity act, these provisions vary by state. In the absence of negligence, these acts would presumably protect school districts from liability if reopening plans are consistent with local, state, and federal laws, as well as guidance from their state board of education, the Centers for Disease Control and Prevention or local health departments. Given the fluid nature of the guidance, there remains an open question as to what might constitute negligence.
School officials across the country are also worried that disruptions brought by COVID-19 will lead to an increase in special education litigation. A class action lawsuit filed on July 28, 2020, alleges that public school districts have violated the federal Individuals with Disabilities Education Act by not fully providing special education instruction and services during the pandemic.
In addition to the over-arching legal liability question, there have also been developments on the workers’ compensation front. Teachers’ unions are asking for confirmation that, should their members get sick, workers’ compensation insurance will cover their medical bills as well as loss of income. However, for teachers and school employees in the overwhelming number of states, that confirmation does not appear to be forthcoming anytime soon. Given the safety concerns and lack of guarantees, school districts throughout the country are experiencing teacher shortages, as requests for leave and retirements have soared.
“Generally speaking, workers’ compensation does not cover routine community-spread illnesses like a cold or the flu because they usually cannot be directly tied to the workplace,” said Vicky Riggs, senior financial analyst, AM Best. “Some states have extended this workers’ compensation coverage to first responders and healthcare workers affected by COVID-19, but only few states have included school employees.”
Whether immunities are provided, pandemic liability suits prevail, or additional states extend presumptive clauses to teachers, there is the potential for significant expense, and possible losses, for school insurers. School insurers could also face an onslaught of employment practice liability lawsuits, in addition to cyber claims, as schools continue to provide virtual learning in one form or another.
To access the full copy of this Best’s Commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=300894 .
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.