Emerging Risk for Public Schools: Risk, Coverage and Opportunities

At the 2017 annual PRIMA conference Robert Bambino, CPCU, ARM, Wright Risk Management Company, Tim Lyons, Munich Re, and Eric Stark, Carmel CSD discuss the new and emerging risks for the public school sector. 

This presentation’s focus was to plan for the future. There was a survey conducted and sent to K-12 public school administrators, educational risk sharing pools and self insured districts, PRIMA school members and risk management professionals. Majority of the respondents were in the industry 10 or more years.

Top areas that present the greatest degree of risk include cyber risk, social media risk, healthcare costs, special education services, tap caps, reduced school aid worker’s compensation costs, and facility use outside by groups. 

Cyber risks

Breaches of personal information of schools and staff. The ability to secure student and staff records is becoming increasingly more difficult and the threat is real. This area really is unknown. 

Social media

Social media could be used as a communication tool for schools and the districts could make better use of social media to better engage with the community. Respondents expressed there are several pros and cons to using social media in school districts. 

Revenue shortfalls

Expenditure cuts lead to increased risk. Workers compensation costs include reduced staffing and supply budgets and increased claim activity. There is risk with facilities use as well. This includes deterioration of facilities and fields, reduced maintenance budgets, and increased claim activity. 

Healthcare costs

The costs of healthcare increases are outpacing the growth of revenues. The costs of health care are continuing to increase by double digits percentages. This combined with a 2% tax cap is the recipe for disaster. Making one piece of the pie larger, makes another piece of the pie smaller. A great portion of the budget is spent in this category. Healthcare costs could lead to cuts in personnel and other areas of expenditures that will directly affect children and the learning environment. 

Other areas of risk include community clinics. This is not seen as serious risk but it was viewed positively. Another area of risk includes expanded pre and after school services. Unlike community clinics this was viewed negatively and seen as a serious risk. This risk was ranked in the top 50%.