The Impact of COVID-19 on Insurance for Higher Education Institutions

At the onset of the COVID-19 pandemic, everything seemed to shut down, including colleges and universities. Most, if not all, stopped offering live classes and switched to online learning, and also sent their students home. Such measures were undoubtably necessary and unavoidable to protect the health and safety of students, faculty and staff. However, such measures prompted a number of class action lawsuits by students against their schools as they looked to recover fees including tuition, room and board.

According to Class Action Countermeasures, a total of 60 class action lawsuits have been filed against higher education institutions. They predict that there are more to come, as the pandemic continues to be a threat and as institutions have made the decision to welcome students to campus or move to online learn for the fall 2020 semester. Beyond these lawsuits, higher education institutions face tremendous revenue losses due to campus closures and refunds. From an insurance perspective, underwriters will now likely place higher education institutions in an elevated risk category.

So where are we now? It’s important for higher education policyholders to carefully review their existing insurance policies, if they have not already. At this time, determine whether the policies that you have in place can help mitigate financial losses and protect against potential risk moving forward. If you are not sure, talk to your agent or broker.

A few considerations related to the impact of COVID-19 on insurance for higher education institutions include:

  • Commercial general liability (CGL) insurance which provides coverage for third-party claims of bodily injury or property damage. Is COVID-19 considered an “accident” or “occurrence” that is covered? This is debatable. In addition, if your CGL policy has exclusions for pollution or contamination, your institution may not be covered.
  • Educators legal liability (ELL) insurance which provides coverage against “nonbodily injury/nonproperty damage liability claims made against the administrators, employees, and staff members of both schools and colleges,” according to the International Risk Management Institute, Inc. (IRMI). It is known as a “hybrid” between directors and officers (D&O) and errors and omissions (E&O) insurance coverages. Such policies can protect a higher education institution against claims filed for breach of duty filing educational services.

At Rose & Kiernan, Inc., we know that COVID-19 is still an evolving risk, and we continue to monitor both the Centers for Disease Control and Prevention (CDC) and World Health Organization (WHO) for any updates that could affect your coverage.

If you have any questions about this topic, you can contact us here or by calling 800-242-2433.

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