The higher education sector is facing unprecedented challenges in the current insurance market. A perfect storm of rising claims, increased litigation, and a hardening market has led to a significant shift in the way educational institutions approach risk management and insurance procurement. In this article, we will explore the key factors contributing to this trend and provide guidance on how higher education institutions can navigate this complex landscape.
The Perfect Storm
Several factors have contributed to the hardening insurance market in higher education. Firstly, the rise of #MeToo and Title IX claims has led to an increase in liability claims, resulting in higher premiums and reduced capacity. Additionally, the growing trend of litigation against educational institutions has further exacerbated the issue. The COVID-19 pandemic has also had a significant impact, with institutions facing new risks and challenges related to remote learning, campus closures, and student health.
Impact on Higher Education Institutions
The hardening insurance market has significant implications for higher education institutions. Premiums are increasing, and coverage is becoming more restrictive. Institutions are facing higher deductibles, lower policy limits, and more onerous policy terms. This can have a devastating impact on an institution’s budget and risk management strategy.
Navigating the Hardening Market
So, how can higher education institutions navigate this challenging landscape? Firstly, it is essential to work with a knowledgeable and experienced broker who understands the unique risks and challenges facing the sector. Institutions should also focus on risk management and mitigation strategies, such as implementing robust Title IX policies and procedures, enhancing campus security, and investing in employee training and development programs.
In addition, institutions should consider alternative risk transfer mechanisms, such as captives or risk retention groups, which can provide more flexibility and control over their insurance programs. Finally, institutions should prioritize transparency and communication with their insurance partners, ensuring that they have a clear understanding of their risks and are able to negotiate the best possible terms.
By taking a proactive and strategic approach to risk management and insurance procurement, higher education institutions can navigate the hardening insurance market and ensure they have the necessary protection and coverage to support their students, faculty, and staff.
