Like other policyholders, hard insurance market trends, aggravated by cybersecurity risks, climate change, and COVID-19, have hit higher education policyholders, yielding reduced or limited coverages for increased premiums. These conditions – reduced coverages and higher premiums – are symptoms of a “hard” insurance market. (A hard market is caused by a mismatch between policyholders’ waxing demand for coverage and insurers’ waning risk appetite.) But higher education policyholders face unique risks that exacerbate existing market conditions, including:

• Title IX claims related to discrimination, sexual misconduct or assault, or harassment;

• fraternity and sorority hazing;

• athletic injuries or illnesses, including traumatic brain injuries and heat-related illnesses;

• open or concealed carry laws and active shooter protocols;

• college admission scandals (e.g., Operation Varsity Blues);

• student protests and law enforcement responses; and

• a post-Roe environment.

Besides unique types of risks, the nature of these risks magnifies liability exposures. For instance, the confluence of latency periods for certain claims, like traumatic brain injuries, with reviver statutes for sexual abuse claims have expanded the temporal scope of tort liability for colleges and universities. In response, most insurers of higher education have capped limits for both types of claims.

And the longevity of potential claims is not the only exposure expansion experienced by colleges and universities. So too is the magnitude of these claims. In its 2022 Large Loss Report, United Educators (UE), a reciprocal risk retention group serving K-12 schools, colleges, and universities, found that the number of publicly reported awards or settlements of at least $250,000 has risen year over year.

For instance, in 2020, the University of California, San Francisco confirmed it paid a $1.14 million ransom to the criminals behind the Netwalker cyber-attack on its School of Medicine in exchange for a tool to unlock encrypted data. The hackers’ initial demand was for $3 million, which the school negotiated down.

And among UE’s 2021 statistics is an $852 million settlement that University of Southern California agreed to pay more than 700 women who accused George Tyndall — the college’s longtime campus gynecologist — of sexual abuse. Before that, USC had paid $215 million to settle a class-action lawsuit representing about 18,000 of Tyndall’s patients. The $1.1 billion total settlement is reportedly the largest sex abuse payout in the history of higher education.

Although the UCSF ransom payment and the USC settlement represent extremes, they are by no means lone data points on the spectrum of higher education settlement payments/awards. High liability losses are increasing, and there is no reason to expect this trend to reverse.

New to the list of risks facing high education policyholders are the potential implications of the Supreme Court’s recent decisions, including New York State Rifle & Pistol Ass’n Inc. v. Bruen, which held that the Second Amendment encompasses a right to carry a handgun outside the home for self-defense, and Dobbs v. Jackson Women’s Health Org. that overturned a half a century of abortion rights. While it is too soon to predict the full impact either case will have on higher education, the changing legal landscape, at a minimum, yields uncertainty from a risk management perspective.

Colleges and universities would benefit from consulting insurance coverage counsel to weigh their exposures and audit their operations to prepare for the legal and coverage issues sure to follow. After all, even educator’s need a back-to-school tune-up!