Think about this scenario: you are mowing your lawn and an unseen rock is hurled by the mower into the property of your neighbor. Your neighbor comes over and politely informs you that you not only damaged her house, but the blood on her face from the broken window now requires a trip to the emergency room.
Consider another scenario: you are accused of harassment by a student's parent.
This Financial Awareness Bulletin reviews different types of liability insurance every educator should investigate: personal, professional, and commercial.
DEFINITION
Liability losses occur when someone becomes legally obligated to pay compensation for harm done to someone else. For a liability loss to occur, all of the following conditions must exist:
• There must be some legal principle governing the relationship of the two parties
• Some definite injury has occurred to one
• Some conduct by the other party has led to that injury
• Either an agreement of the parties or a judgment of a court has been made concerning the amount of the liability
[Source: Property and Liability Insurance Principles, Insurance Institute of America, First Edition, 1987, page 64.]
The basic concept of United States law holds that one party must prove that the other party was negligent in their actions and caused the loss.
PERSONAL LIABILITY INSURANCE
Most personal liability risks are covered as part of a comprehensive homeowner's, renter's, or condominium owner's insurance policy and a comprehensive automobile insurance policy. If a neighbor slips on your icy walkway, then your home insurance policy will provide liability (and medical) coverage for you and your neighbor. For some, these policies might not provide enough coverage, so a high-dollar umbrella policy ($1 million) that wraps around your auto and homeowner's policies may be purchased.
PROFESSIONAL LIABILITY INSURANCE
What if an event involving you causes property damage or bodily injury while you are at work, either on school grounds or at a school function? Personal liability insurance will not pick up that risk - you need professional liability insurance for this purpose.
The NEA for years has recognized the importance of having such protection - so much so, that the Educators Employment Liability (EEL) insurance contract is just one of many benefits of membership provided at no additional cost to the member. This policy protects you in most instances if a student or a student's parents sue you. It also reimburses you if your personal property is damaged in assault-related incidents. The education activities must be directly related to the member's school/institution. The four types of coverage provided by the EEL contract are as follows:
Coverage A - Educators Liability (Civil)
• Payment of the legal costs of defending civil proceedings (other than proceedings concerning Civil Rights) brought against a member in the course of their work as an educator, and up to $1 million per member per occurrence in damages assessed against the member as a result of such proceedings
• Up to $300,000 per member per occurrence for civil rights claims only
• Coverage is subject to a $3 million per occurrence aggregate for all claims
Coverage B - Reimbursement of Attorney Fees for Defense of a Criminal Proceeding
• Reimbursement for attorney fees and other legal costs up to $35,000 if the member is charged with violating a criminal statute in the course of their employment as an educator, and they are exonerated from these charges (State insurance laws do not permit this coverage in New York State.)
Coverage C - Bail Bond
• Reimbursement up to $1,000 of bail bond premium if the member must post a bond as the result of an occurrence arising from their employment as an educator (State insurance laws do not permit this coverage in Kentucky and Wisconsin.)
Coverage D - Assault-Related Personal Property Damage
• Payment of up to $500 for damage to a member's personal property when caused by an assault upon them in the course of their employment (vehicles and school property are excluded)
This policy is an occurrence policy, which means that claims arising from covered acts that occur during the contract period are covered no matter when the claim is made.
The EEL policy covers criminal and civil rights cases, but not cases arising out of the discharge or layoff of a member or involving other "job rights" issues. These types of cases are covered by the Kate Frank-DuShane Unified Legal Services Program. This policy pays its benefits when other sources of insurance (e.g., a school district professional liability policy) are exhausted.
COMMERCIAL LIABILITY INSURANCE
In some cases, NEA members may need to obtain additional liability insurance protection for providing tutoring services in their own residences. This type of "business" activity (whether compensated or not) is not covered by the member's personal homeowners/renters/condo insurance policy or by the NEA professional liability policy. Most insurance companies will modify an existing homeowners/ renters/condo policy with a business-pursuits coverage rider (usually called the Permitted Incidental Occupancies - Residence Premises Endorsement).
Contact your insurance representative to inquire about the types of activities that are covered under your homeowners/renters/condo insurance policy. Depending on the activity, you may need to obtain a separate commercial liability policy.
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Take advantage of low rates with group coverage from your Association. NEA Member Benefits offers two homeowner’s insurance programs: NEA Homeowners ® Insurance underwritten by Horace Mann Insurance Companies and NEA Members Auto and Home Insurance Program ™ underwritten by California Casualty Management Company. Both programs offer special features for NEA members and affordable rates. To learn about these programs and get a rate quote online visit: http://www.neamb.com/insurance/index.jsp
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