FEATURE ARTICLE
Protecting an International School's Most Important Assets
TIPS & ADVICE
Choosing the right coverage for your multinational organization
PARTNER SPOTLIGHT
International School of Sofia
PRODUCT SPOTLIGHT
Commercial Coverage
DID YOU KNOW
Clements Insight
ON A GOOD NOTE
A word from our clients
|||| Feature Article
Protecting an international school's most important asset by Yan Bui
How to protect administrators, teachers, and staff members from liability risk.
Whether your multinational organization is an international school or a business corporation, securing coverages such as Directors & Officers' Liability insurance for your institute is important. Directors & Officers' Liability coverage protects board of directors, trustees, and staff members against lawsuits. The article below offers guidelines on choosing the right protection for your organization.
The parents had complained numerous times about the instructor. His teaching methods were unconventional, and he showed a reckless disregard for the pupils' welfare. In one particular incident, he had abandoned the pupils during a class trip, opting instead to peruse the local market. He claimed it helped the pupils "build character." Ultimately, it was in the best interest of your school and pupils to terminate the instructor's tenure. You would have preferred not to have done so, but you were left with little choice.
So why have you just been presented with a lawsuit filed by the instructor, claiming wrongful termination? And worse, why have you been personally named in the lawsuit?
Although Directors and Officers' liability insurance offers important protection for international schools, it is often overlooked. While many international school administrators understand the importance of protecting assets such as property and contents, many fail to secure protection for teachers and staff members. Thus, the assets of the teachers and staff members, as well as the school's, are at risk.
The number of law suits against schools continues to rise, and administrators are finding themselves caught in the fray. Today, school directors, officers, past and present board members, and even teachers are exposed to various risks associated with the operation and instruction of the international community. These risks can lead to lawsuits involving wrongful termination, wrongful student-related practices, wrongful educational instruction, sexual harassment, loss of academic accreditation, and more. To make matters worse, administrators and teachers can be cited individually in resulting lawsuits, thus placing their personal assets at risk.
Lawsuits can cost schools, their administrators, and other staff members (including teachers) up to millions of dollars in defense fees and settlement awards. Schools are strongly encouraged to secure comprehensive insurance coverage to ensure that all parties are adequately protected against unexpected litigious actions.
When investigating insurance protection options such as Directors and Officer's liability coverage for your international school entity, there are some key questions to ask, such as:
Who is insured (covered) under the policy?
Typically, the "school entity" is covered, which includes school employees such as faculty members, student teachers, volunteers and others acting for or on behalf of the school. In addition, directors, other administrators, past and present members of the board of trustees would be covered under a protection policy. Thus, a previous board member whose policies cause a current staff member to bring a lawsuit forward would be protected.
What are the policy limit(s), policy term(s), and premium?
The policy limit can vary, depending on the needs of your school and the appropriate level of coverage. In addition, factors such as the school's size and annual revenue also affect the policy limit. The premium will typically be calculated based on the policy limit and other factors, such as student and faculty population, the school's location, and other risks. Other factors affecting the premium amount include the implementation of adequate by-laws, the availability of an Employee Handbook, and the school's finances. A general policy lasts one year, and the school can choose to renew it annually.
What is typically covered?
Although policies will vary according to each international school's unique needs, most will typically provide similar coverage, including employment practices claims, educator's errors and omissions claims, and administrative errors and omissions claims. These claims typically encompass discrimination allegations and breach of fiduciary duties, particularly with regards to employee pension plans. In addition, Professional Liability insurance (which includes Directors and Officers' Liability) pays for defense costs and legal expenses resulting from claims alleging failure to maintain insurance. The defense costs and legal expenses for covered claims are included in addition to the limits of liability.
What is not covered?
Although the wording may vary from policy to policy, most will not cover criminal acts, dishonesty, fraud, a violation of a civil right, or other acts as specifically outlined. Some policies will also specify involvement in pollutants and other harmful environmental items (including asbestos) as exclusions to coverage. The policy may also specify that coverage is provided for defense of the Insured, but asserts that the insurance company has no obligation to pay for damages awarded. It should be noted that this is just a sample list of exclusions, and exclusions specified in the policy may differ. In addition, if the allegations made against the school entity prove to be false, then the school may be reimbursed. Check your policy to understand the specific guidelines.
What additional coverages are suggested?
Schools seeking additional coverages can discuss possible options with their international insurance provider. Some specialty coverages can include, for example, protection during events, such as fundraisers, theater productions, competitions, or conferences held on school premises. Additional specialty coverages can include Kidnap & Ransom insurance as well coverage for Expropriation and Nationalization of Assets, which will take place in the event a country's government seizes the school and its assets. In addition to Directors' & Officer's Liability, Employment Practices Liability protection is recommended. Such coverage will provide protection for schools in the event of sexual harassment litigation, wrongful termination and discrimination. Make sure you ask your trusted international insurance provider for information on additional coverages your school might require.
While it is paramount for schools to insure their property and contents against loss, it is also sound advice to secure protection for their teachers and administrators as well. Securing Directors and Officers' Liability, as well as other insurance protection plans, will help ensure that litigious actions against the school will not place the personal assets of individual school administrators, teachers, and other staff members at unnecessary risk. Examine your options carefully, and discuss the necessary level of protection needed to adequately protect your school and staff.
Reprinted with permission of the Association of International Schools in Africa (AISA), from the August 2005 issue of their newsletter. For more information on AISA, please visit their homepage at http://www.aisa.or.ke/.
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Choosing the right coverage for your multi-national organization.
So you have a Group Medical plan and Property and Liability coverage for your multinational organization. But do you know the difference between Kidnap & Ransom and Political Risk insurance? Multinational organizations today are exposed to a variety of risks worldwide.
Test your knowledge on Commercial Insurance coverages by playing our matching game below. To play, simply match the description to its coverage.
| A. | Not only protects Buildings and Contents, but also Loss of Income and Computer & Data. |
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| B. | Coverage for negotiations, transfer of funds, and security consultants in the event an individual is taken hostage. |
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| C. | Offers protection to staff members in the event of bodily injury by accident or disease out of and in the course of employment. Includes Loss of Wages Reimbursement and Disability and Death Benefits. |
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| D. | Covers individuals in highly volatile areas against acts of aggression, conflict, and violence, particularly by military or rebel groups. |
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| E. | Insurance protection for goods and property while they are being transported from one location to another. Protection against Acts of War is also included in this coverage. |
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| F. | Protects your multinational organization's automobiles and trucks. Also includes Terrorism coverage and Rental Insurance Reimbursement expense. |
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| G. | This plan covers emergency evacuation for multinational organizations as a result of unexpected government events in foreign countries. Repatriation and Salary Continuation are included. |
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| H. | Individuals protected under this plan are covered for medical evacuation, prescription drug benefits, and more. A lifetime benefit of $5 million (USD) per person is included. |
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| I | All types of commercial insurance for multinational organizations while they are located in the USA. |
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| J. | Unique coverage for multinational organizations seeking protection that is atypical and difficult to find. |
CLICK HERE TO VIEW THE ANSWER KEY.
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The Anglo-American School of Sofia
Nestled in the valleys of the Vitosha Mountain, The Anglo-American School of Sofia is a unique institution, providing quality education to nearly 200 children grades Pre-School to 8 from 36 different nationalities. The School provides a relaxed environment in which children can learn and feel comfortable. Instead of stressing memorization, teachers emphasize application of knowledge, allowing students to enhance their critical thinking skills. The average class size is small, with a student-teacher ratio of 5:1, allowing each child to receive full attention. The School stimulates the children's minds outside of class as well. Children are encouraged to participate in sports leagues, art activities and more. The School hosts an International Tennis Tournament this Fall, with teams competing from Prague, Budapest, Bucharest, Belgrade, and more. The school sponsored Math Counts last year and an Artfest the year before. "We pride ourselves on providing the best education for our international community here in Sofia, Bulgaria," says Director E. Larson. "By combining knowledgeable staff members and a difficult, but thought-provoking curriculum, we challenge our students to be the best." |
PARTNER SNAPSHOT Name: The Anglo-American School of Sofia Founded: 1967
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The school is accredited by the European Council of International Schools and the New England Association of Schools and Colleges. For more information on the Anglo-American School of Sofia, please visit their homepage at sofia.ecis.org/
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|||| Product Spotlight
Global Solutions for Organizations
Multinational organizations and international schools around the world secure standard insurance coverages such as Property & Liability Coverage and Group Health policies. However, many times those organizations overlook important protection for other inherent risks. Some of these coverages include Directors & Officers Liability, Foreign Workers' Compensation, and Kidnap & Ransom policies.
The specific type of insurance coverage and the appropriate level of protection will vary depending on the size and operational activities of your multinational organization. For more information on the various coverages available to your organization, please click on the link below:
Worldwide Property & Liability
To determine the right level of protection for your multinational organization, contact Clements International today at +1(202) 872-0060 or via email at info@clements.com.
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M. Juanita Guess Award |
Clements International's CEO, Jon Clements congratulates McSherry and Tarter. Thank you for all your hard work! |
Hurricane Katrina Disaster Relief
All of us at Clements International are truly saddened by the loss of life and destruction of property that has occurred in Louisiana, Mississippi and Alabama as a result of Hurricane Katrina. Our thoughts are with the victims, their families and the many heroes that are now involved in the rescue, recovery and rebuilding effort.
As support continues to grow across the country and the world, Clements International has committed donations to Habitat for Humanity International, The National Volunteer Fire Council, and America’s Second Harvest. In addition, we have created an internal program which allows our employees to make donations to the charities of their choice and provides a matching contribution from Clements.
For more information on charitable organizations involved in the hurricane relief effort, please visit http://www.networkforgood.org.
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|||| On a good note...
Here is what our clients have to say...
Dear Clements,
Thank you very much for the expeditious handling of our claim. You can be sure that news about service travels fast in the foreign service and Attaché communities.
Warmest Regards,
Attaché
Prague, Czech Republic
Dear Clements,
I just wanted to tell you that I recently renewed my auto and HHE insurance policies, and that I received excellent service from your staff. I had initially sent an inquiry via your website regarding auto liability insurance in Syria, our next posting, and received a telephone call here in Ecuador from your Washington office within 48 hours. Your representative explained the requirements, options and procedures. After submitting the applications on line, I received notifications of receipt, and within 72 hours the renewed policies themselves on line.
Sincerely,
Foreign Service Member
Guayaquil Consulate Republic
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ANSWER KEY:
CHOOSING THE RIGHT COVERAGES FOR YOUR MULTINATIONAL ORGANIZATION
A-7; B-5; C-2; D-9; E-1; F-4; G-6; H-3; I-10; J-8