Yours may be among many charter schools that have had a huge influx of students due to developments from the coronavirus pandemic. Under California’s new state budget, charter schools will not be given additional funding for those students because the ADA was frozen to pre-COVID numbers. These circumstances mean you are faced with doing more with less money. Finding additional value from the premiums you spend on insurance coverage is one way to realize significant savings.
This year, charter schools have received hefty increases – in the range of 40-60% - from their existing Property & Casualty programs. There are various reasons these rates have risen so rapidly, but few because of your own claims experience. In pooled programs, there may be a lack of insurance capacity, or you may be subsidizing losses of other members participating in the pool. In these programs, it is also important to understand not only the rates but your total cost of risk. Such expenses can include your self-insured retention, and the confidence level set for expected losses that could result in additional assessments. Finally, you could be paying for packaged loss control services you may not need.
"It’s important to understand both the premium rates and the total cost of risk."
If you do participate in a Property & Casualty pool, there is typically a procedure and deadline for you to provide a provisional notice of withdrawal for the upcoming program year. The specific rules are spelled out in the pool’s bylaws and the date by which this notice must be provided. Giving a provisional notice of withdrawal does not commit your charter school to leave the pool, but allows you flexibility to examine and take advantage of alternative sources of coverage that may save you money under more favorable terms.
In developing your charter school’s customized insurance and risk management programs, you may need assistance helping potential carriers understand the nature of the exposures you have and, more importantly, the exposures you don’t have. The advantage includes developing a program that secures the insurance coverage needed to protect your charter school’s financial position and only paying for the loss control services you utilize. This approach provides greater control over your total cost of risk and better value from your premium dollar.
As you look for P&C alternatives, a broker/consultant can help you navigate pool withdrawal provisions and reduce your administrative burdens.
