Focus

Insuring Work-Based Learning Experiences

RISK MANAGEMENT by JACK RUSSELL

As work-based learning programs grow exponentially across the country, so does the potential for a catastrophic student injury. The possibility of injury to an unpaid student in a school-sponsored business environment warrants serious consideration.

By addressing some basic risk management issues up front, school district leaders can reduce many risks while protecting both human and financial resources. The key is adequate and appropriate insurance protection.

A few years ago, a student at a Vermont technical center was seriously injured when a truck slid off a lift and pinned him against a wall. His parents were forced to sue the school to pay the medical bills.

Two years later, the lawsuit was settled out of court for a sum that exceeded 156 years of accident insurance premiums (not including the time, aggravation and personal expense for teachers, school administrators and parents). In addition, the school's liability insurance premium increased.

Safety Nets
Risk management in such cases has two components:

  • pro-active steps to reduce risk (such as a risk management team and appropriate policies and procedures); and
  • adequate insurance.

    In this instance, the technical center did follow pro-active risk-management procedures. No one could have foreseen the accident. But adequate insurance could have provided a financial safety net that might have prevented litigation.

    The Barre Regional Vocational-Technical Center in Vermont, winner of the American Vocational Association’s Business/Education Partnership Award for 1996-97, provides a good example. The center has a work-study program at a local hospital for students interested in health-care careers. Because the participating students aren't paid, both the medical center personnel and the technical center are legally liable for any accidents.

    But the school district, in anticipation of potential legal problems, purchased accident insurance to help protect the employer and the school. Although this may not have been the only reason for the hospital's willingness to participate, the district's cooperative work coordinator, Walt Dowling, believes it was a critical factor.

    "This type of catastrophic accident coverage," says Dowling, "has paved the way in solving questions of financial responsibility, perhaps easing the fears that [might otherwise] have prevented the program from taking place."

    What Dowling and others have discovered is that a combination of excess accident policies and liability policy endorsements specifically designed to provide coverage for non-paid, work-based learning programs are a significant part of the risk-management program.

    Essential Insurance
    Accident insurance is basically no-fault insurance. If an accident occurs within the scope of the policy, medical claims are usually paid on a usual and customary cost basis. Accident insurance works with liability insurance to solve a problem quickly and relatively inexpensively.

    Liability coverage is negligence insurance, as opposed to medical insurance. A school's general liability policy may not provide coverage for the school or students participating in many potential non-paid work-site activities. But in most states, policy endorsements are available to expand existing coverage.

    For example, most schools have standard commercial liability policies, which contain a list of exclusions from coverage for problems such as pollution or a nuclear accident. Many exclude professional activities, especially those dealing with health-service issues. Therefore, an allied health endorsement would expand coverage to include students and teachers participating in health service-related activities as part of a curriculum.

    Unfortunately, many of the work-based educational programs are so new that we don't have a large body of claims history. Because of this, only a few insurance companies are willing to offer what I consider adequate accident policies.

    The key here is that accident insurance and, if needed, liability endorsements help reduce the financial risk exposures of schools and solve injury problems. They also enhance the district’s public image and help meet a school's ethical responsibility to its community business partners.

    Suggested Actions
    School leaders can take several measures to help ensure that students, as well as the school district, are covered in case of injury.

  • Obtain student accident policies that provide adequate coverage for students while at job sites. At a minimum, I suggest $1 million excess usual and customary accidental medical expense benefit. If your local liability agent is not familiar with this kind of insurance, suggest that he or she contact a special risk agent.
  • Meet with your agent and explain the program, the number of participating students and the specific types of non-paid activities.
  • Obtain proof in writing from your agent that your students, schools and employees are protected under your liability policy while they participate in these activities. If they are not, obtain appropriate endorsements to ensure liability coverage.
  • Address pro-active issues including establishment of a risk management team that includes your insurance agent and that is charged with developing school policies, procedures, checklists and protocols. Many liability insurance companies will send a team or provide information free for the asking. It is not expensive or time-consuming, but it could save you time, expense, aggravation, injury--and maybe even the program itself.

    Jack Russell is the owner of Green Mountain Special Risk Insurance Agency, P.O. Box 52, Calais, VT 05648. He is the author of Vermont's School-to-Work Risk Management Guide