Violence insurance still inexpensive
MARIETTA — Although mass shootings at schools provoke national horror and extensive media coverage and discussion, the insurance school districts purchase to indemnify themselves against such events is inexpensive, suggesting that it is considered a low-risk product by insurers.
The package of policies carried by Warren Local Schools and Belpre City Schools, both of which have an enrollment of about 2,000 students, costs $535 a year for an aggregate limit of $1 million, with limits on several sub-categories. Those include trauma counseling, the cost of substitute teachers, crisis management, EMT and medical expenses and death benefits.
The policies are provided by Ohio School Plan, a cooperative controlled by a board of directors made up of member school superintendents and treasurers.
In addition to providing insurance against the awful prospect of a school shooting, the insurance cooperative also assists districts in prevention work.
“They’ve got a loss control team, and we’ve had them here to look at our buildings,” said Lance Erlwein, treasurer for Belpre City Schools.
“They do training and seminars, take us through incidents, run us through and teach us how to mitigate situations.”
Erlwein, who worked in the insurance industry before moving to public school finance, said the insurers do an actuarial analysis to determine the premiums and coverage levels.
“You don’t ever want to say it won’t happen, but they look at the odds, spread the risk out among the policy holders,” he said.
There are other options for schools, one of which is private commercial insurance. One of the companies offering policies to schools is McGowan Program Administrators, an Ohio-based underwriter.
Paul Marshall, a broker with McGowan, said that after the Marjorie Stoneman Douglas mass killing in Parkland, Fla., his company received more than 200 requests for policy estimates and has written several for school districts in the $5 million to $10 million range.
One reason school premiums are relatively low, he said, is that schools already are well engaged in safety and security practices.
“School systems have been focused on safety and child wellness for a long time,” he said. “They have ongoing background checks, training. We expect them to be doing the standard stuff like training in ALICE (Alert, Lockdown, Inform, Counter, Evaluate), anti-bullying. We rarely come across a school we won’t insure.
“They’re usually impeccable compared to other places, they’re at the very top of loss control risk management.”
The difficulty, he said, is that it’s just hard to stop someone who has the intent to harm, no matter how well prepared you are.
“It’s like driving, you’re only as good as that goofball behind you,” he said. “If you are in the vicinity, you’re going to be in an accident, and when that happens, you had better have insurance.”
Marshall said the company evaluates the school and sets premium levels according to those findings and the overall coverage level the school wants. Discounts are available if the school takes actions that reduce risk.
“That which is paid for gets attention,” he said in reference to premiums. “We could say, for instance, that if you continue on this track such as social media monitoring, you get a 10 percent credit on your premium.”
As an example, a school district in Florida, he said, notified the company it was putting an armed and dedicated school resource officer in every building and got a break on premiums when its policy renewed.
Marshall said McGowan doesn’t disapprove of arming teachers, as some districts such as Frontier Local Schools have done, but only if the program incorporates the complete approval and engagement of local law enforcement authorities.
Marietta City Schools and Fort Frye Local Schools both confirmed they have policies. Wolf Creek Local Schools did not respond to an inquiry, and superintendent Brian Rentsch at Frontier Local Schools said his district had not been approached about a policy but would present any such proposal to the board.
“I’m not sure if we would purchase,” he said in an email.
Melcie Wells, the treasurer for Warren Local Schools, said she believes the coverage the district has through the Ohio School Plan is adequate. As a comparison, she said, the district’s property insurance costs $34,000 a year.
“It’s pretty low risk compared to storm and flood damage,” she said.
Marshall said it’s difficult to predict the ultimate cost of a mass shooting. In Parkland, the district accumulated more than $8 million in a fundraising campaign and that still didn’t cover everything. The Virginia Tech killings in 2007, which resulted in the deaths of 32 people, cost upward of $50 million, he said.
“You never know,” Erlwein said. “No coverage could be adequate for some of these events. You could never have enough insurance.”