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Reading, 'Riting and Risk Management.

With school violence making headlines, risk managers are becoming a vital part of educational systems. Their roles include keeping schools safe, filing claims when disaster occurs and even administering health benefits for school employees.

The massacre at Columbine High School in Colorado in 1999 and last month's fatal shooting at a California high school are just two examples of school violence that underscore concerns about student and faculty safety. Since 1979, 53 students and teachers in the United States have died as a result of school shootings, according to the latest statistics from the Ribbon of Promise National Campaign to End Student Violence. With the recent incidents of gun violence, schools have been hiring risk managers to assess the potential dangers and help mitigate the problems.

Although there is no data on how many schools employ risk managers, the Risk and Insurance Management Society reports that 140 of its more than 3,900 corporate members are colleges, universities or professional schools that have some form of risk manager on staff. But among elementary and secondary schools, where recent violence has made headlines, only 29 schools are current RIMS members. The majority of school districts that do not have risk managers on staff point to a lack of funds and the small size of the districts.

Risk managers can be involved in nearly every aspect of a school's operation. From purchasing insurance to overseeing student accident reports, from approving off-campus field trips to inspecting playground equipment, risk managers are relied upon to ensure school safety and identify risk-related issues. Almost anything a school district does has some kind of implication for risk management, said Cindy Acosta, risk management technician for the public school system in Sumner, Wash.

Evolution of School Risk Managers

School risk managers have been around for nearly 30 years. "As risk management became a profession in schools in the '70s and '80s, prior offices that would buy insurance for school districts expanded to become full-fledged risk-management offices. Large districts started looking at self-insurance as an alternative to buying first-dollar insurance, because it was more cost effective," said Scott B. Clark, administrative director of the office of risk and benefits management for the School Board of Miami-Dade County in Florida. Districts then started focusing on a number of different risk-management objectives, from safety to evaluating how much risk districts can assume through risk-management practices, eventually evolving the roles into the school risk-management profession that exists today, Clark said.

From protecting school districts from liability to adjusting claims, risk managers have carved out an important niche in the education environment. "The ultimate goal of our risk-management department is to identify, develop and implement different risk-management practices in order to deal with those issues," Clark said.

Risk managers are most commonly hired by large, urban educational systems. "When you have 15,000 to 20,000 students, it is common for a district of that size to have a risk manager. However, when you have systems smaller than that, it is typical for districts to pool together and have an outside manager entity handle various aspects of the school's risk management," said Joe Myers, executive director of Redwood Empire Schools Insurance Group in California. The group is responsible for providing risk management and benefits support to nearly 14,000 employees in 47 school districts in Sonoma County, Calif.

Schools not using the resources of outside providers often rely on principals or superintendents to take on risk-management roles.

"The principal is the school's primary line of defense as a risk manager. He or she fields the initial onslaught of claims made by students for injuries," said William D. Wood, director of risk management and safety with the Norfolk Public Schools in Virginia. While all principals must have some knowledge of risk management, several smaller districts turn to vendors to secure insurance and loss-control advice.

School risk managers come from a variety of backgrounds, including previous work as insurance adjusters, underwriters, lawyers and human-resources administrators. Ron Hale, director of risk management for the Newark Public Schools in New Jersey, is a former underwriter for several major insurers, including the Ghubb Group of Insurance Cos. and American International Group. Hale now plays a vital role in protecting the liability and safety of the district's 42,000 students and 7,300 full-time employees.

The size of a school's risk-management department varies greatly between districts and universities. Indiana University in Bloomington, which houses one of the largest risk-management departments, employs a team of more than 30 full- and part-time staffers. It is more common, however, to find only a handful of employees in school risk-management offices, said Larry V. Stephens, director of risk management at Indiana University, and president-elect of the University Risk Management and Insurance Association.

Managing Risks

Nearly every operation found in schools can be linked to a potential risk. With science lab experiments, bus transportation, large and often unwieldy props used in school plays and athletic programs, schools turn to risk managers to minimize injury and liability risks.

Like elementary and secondary schools, colleges and universities also are surrounded by potential exposures. But for institutions of higher education that house students and have medical and dental schools, risk managers encounter an even greater number of risk-related issues.

"We face a little bit of everything, particularly a large university such as ours that conducts research," said Paul Glancy, director of risk management at Boston University. "Protecting fine arts in exhibitions, medical research, worldwide operations in terms of foreign programs and ensuring the safety of the 8,000 students sleeping on campus are just a few of the areas we work with daily to manage risks."

Another one of the many areas Boston University's risk-management department oversees is the safety of student-made films in the school's TV and film department. "We work with students making thesis films, helping them provide evidence of insurance for renting equipment and filming at outside locations," Clancy said. "In addition, students using Screen Actors Guild members in their films are required by SAG to supply the actors with workers' comp, even though they are not our employees or receiving compensation." In addition, Clancy and his staff review scripts to ensure that props are safe and that physical activities occurring in films do not put actors at risk.

One such situation Clancy's department encountered several years ago involved a student who planned to fire real guns in a film, After carefully reviewing the script, Clancy recommended the student splice in film clips, instead of using an actual gun, thereby eliminating the potential for a possibly dangerous liability.

Overseeing Claims and Liabilities

Claims and loss prevention are two central areas of school risk managers' duties. Some are heavily involved in these areas, while others rely on outside consultants or insurance companies to assist with claims processing. Indiana University's risk-management team, for example, handles its own small claims.

One of the major roles of many school risk managers is administering and managing liability insurance for their districts and boards. The School Board of Miami-Dade County employs a third-party administrator, which has liability adjusters housed within the district's risk-management offices to assist in this effort.

"These individuals are responsible for negotiating and settling claims for self-insured programs besides those which incorporate general liability claims, such as automobile, police professional liability and third-party property liability," Clark said. Administering the district's property insurance program, which entails insuring the $5 billion worth of buildings and their contents, encompasses an especially large portion of his department's responsibility, particularly after the $100 million property damages that resulted from Hurricane Andrew in 1992.

Risk analysts also are part of several districts' risk-management teams. "These individuals are responsible for reviewing and writing risk-management terms of contracts, ranging from off-premises field trips to contracting with outside transportation companies," Clark said. Miami-Dade County's analysts also ensure all contractual provisions and insurance policies are kept up to date and that the school board is named as an additional insured and is protected, he said.

Safety First

School districts today are faced with risks that were once rare or unknown. The threat of gang warfare, the rise in school violence, drug trafficking and the increase is missing children make safety an important issue among school administrators. While not all school risk managers have a hand in their district's safety and security issues, several play key roles in this area.

Recognizing the potential for violence also has become an important issue for those associated with schools' risk-management functions, Immediately after the Columbine High School shootings, in which two students killed 12 classmates, one teacher and themselves, the Redwood Empire Schools Insurance Group implemented a countywide hot line for schools, students and parents to phone in anonymous tips about weapons possession, drug use, violent behavior and threats. Myers said the hot line, which receives two to four calls a week, has proven successful. The calls range from reports of threats made against students to suspected arson-related events.

Safety is one of the top priorities of the Redwood Empire Schools Insurance Group. In addition to working with the districts and employee groups on in-service and formalized training, the group inspects facilities to determine where risks come from, Myers said. They also work closely with the county's police, fire and emergency rescue departments to implement safety-planning operations.

Because risk managers often are responsible for surveying their schools' security-related needs, many develop close ties with local police departments. Some schools implement their own on-site police forces. Brad Bailey, risk manager with the Houston Independent School District in Texas, said this creates multijurisdictional challenges. "Many schools now have their own police departments, so they have a role to play in this area, They have their own challenges, because they are trying to differentiate between the needs for the police department in the school and municipal and state law-enforcement groups," he said.

Under the Benefits Umbrella

The administration and oversight of employee-benefits programs sometimes become the duties of school risk managers. The risk-management department at Miami-Dade County is responsible for managing the district's 45,000 benefits-eligible employees, operating with an annual expenditure basis of nearly $150 million. "Part of our responsibility is to participate in the collective-bargaining process for each union [teachers, police, bus drivers, custodians] represented by our school board's employees," Clark said. In addition, the district's risk managers work with employees to develop personalized benefits packages that best fit their needs. These packages include coverages such as life insurance, long-term care, prepaid legal, health, dental, vision and long-and short-term disability.

Workers' comp programs are another area that lies within the realm of several school risk-management departments. Risk managers at the School Board of Miami-Dade County administer and implement workers' comp benefits for employees who become ill or injured within the course of their employment. "We are self-insured for workers' comp, so we contract with a company to handle the claims and contract with another company to work with the managed-care portion of the workers' comp area," Clark said. Part of his responsibility entails monitoring employees' medical care and trying to get them back to work in pre-injury jobs or other positions that they are physically capable of handling after their injury.

The risk-management department of Newark Public Schools also is heavily involved with workers' comp. It manages litigation, ensures that bills are paid and monitors employees' return to work. Hale said his department processes about 1,000 workers' comp claims a year. In addition, the department has a good processing track record, ensuring that all employees injured on the job are seen by a doctor and a report is filed to the school within 24 hours.

Escalating Challenges

Funding has always been and continues to be a major concern for school districts.

"I think the biggest challenge we face is the allocation of funding and trying to find money to fund the management of risks," said Myers of Redwood Empire Schools Insurance Group. "School districts are torn between trying to fund programs, teachers' salaries, testing, etc."

Recognizing these difficulties, Myers' group offers its services at no additional charge to clients. Loss control, in-service training and other services are paid for through districts' premium dollars.

Another challenge faced by schools is the rise in federal discrimination claims, such as the U.S Equal Employment Opportunity Commission allegations of discrimination and sexual misconduct by school employees. "Anytime you deal with kids, you are subject to a higher standard, presenting additional risks. It is crucial that people be educated and systems are developed so that the district is protected from these risks," said Miami-Dade County's Clark.

The Future

School risk managers believe that their roles are continually evolving in an environment that is increasingly subject to new risk factors. "As a result of this, greater emphasis must be placed on training school employees on the proper methods to identify risks and address them accordingly so as to promote effective management," said Norfolk school system's Wood.

Schools that do not have a risk manager on staff are likely to discover--by way of disaster--the need for such a position. "Universities are often awakened by disaster, and sometimes risk management is overlooked until there is a [situation]," said Stephens of Indiana University. "What we have tried to do here is get out of that cycle and say that insurance is only a small part of risk management. And regardless of what the insurance industry is doing, we need to concentrate on risk management."

But Stephens acknowledged that financial shortfalls in many districts could hinder the growth of risk management in schools. To cut costs, there may be a tendency for colleges to simply buy insurance and make do without a risk manager.

"As conditions change or are forced to change because of some type of disaster, they become more interested in the risk-management side of it," he said. "We hope that more schools see the importance of risk managers."

Challenging Times Ahead

As school districts increasingly rely on staff risk managers to ensure the safety of their students and employees and assist with identifying and handling risk-related issues, several trends are expected to emerge.

One trend is the movement toward enterprise risk management. "The idea is that risk management goes beyond just people who fall clown or have accidents. It gets involved in the risk-management aspects of other areas, like finance and public relations," said Larry V. Stephens, director of risk management at Indiana University and president-elect of the University Risk Management and Insurance Association. Although enterprise risk management has been a topic of several recent conferences and position papers, Stephens believes it is an area that most higher-education risk managers will have difficulty moving into because of staffing limitations and resistance to change within their schools.

School risk managers also are likely to take a more active role in risk prevention, Stephens said. "When I first started my job, the focus was really on insurance--you bought it, relied on insurance companies and didn't do much to affect your own environment," he said. But today, more schools are trying to reduce risk factors themselves. "There is now a growing and continuing trend to try to affect the environment and become safer, with less reliance on insurance," he said.

The new ergonomics standard drafted by the U.S. Occupational Safety and Health Administration--and later repealed by Congress--would have created ripples in school systems throughout the nation, said Stephen Finley, director of risk management at the Denver Public Schools in Colorado. "In those states in which OSHA impacts local government with its ergonomics standard, I believe it is just going to devastate them," Finley said before Congress voted in March to repeal the standard. President Bush is expected to sign the repeal. Finley pointed to two effects the proposed standard would have had on schools: increased manpower would have been needed to stay in compliance, and there were uncertainties over who would pay ergonomics claims that may have fallen outside what is covered under workers' compensation.

Ergonomics claims are a very real concern for school risk managers, Finley said, because many members of today's work force are part of the baby boomer generation. As workers age, they become even more susceptible to ergonomic-related injuries.

An aging work force also strains workers' comp and health benefits coffers, Finley said. "Rising costs in health care is the same thing we see driving up workers' compensation costs," he said.

Spotlight: Denver Schools Focus on Prevention

With 70,000 students and nearly 11,500 employees on its rolls, the Denver Public Schools system respects its need for risk managers. The potential for injuries and liability claims exists in just about every corner of the district's 129 schools and fleet of 450 buses, said Stephen Finley, director of risk management for the district.

"We have a kitchen in every one of our schools, 33 licensed day-care centers, 12 school-based health clinics, nine swimming pools and 10 rifle ranges connected with our junior ROTC program," Finley said. These are just a few areas that he and his five staff members must manage daily to ensure the safety of those using the schools' services.

Two years ago this month, Colorado got a firsthand lesson in the type of risks that public schools face. The shooting spree by two students at Columbine High School in Littleton, Colo.--a suburb of Denver--shocked the nation and opened eyes about the need for schools to protect themselves as well as their students and employees.

"Our mission is to provide a safe place to learn and work," Finley said. "Everything we do focuses on working on this mission, either around student incidences or workers' compensation situations."

But this is not an easy job, especially when resources are scarce. Finley and his team concentrate on prevention measures. "Our program focuses on reducing injuries, thereby reducing costs," he said. And when incidents occur, the risk-management team saves money by handling the processing of many of the district's small claims.

Denver Public Schools anticipates that the district will process nearly 3,000 incident claims this year, including those for vandalism, student--accident reports and all workers' comp-related incidents. "We will do between 1,200 to 1,400 student accident reports, about 850 first reports of injuries in the workers' comp arena and between 40 and 60 motor vehicles accidents-most being minor," Finley said.

Another issue that creates concerns-both of safety and for financial reasons -- is the aging of school buildings.

"I think we're seeing escalating costs and diminishing resources in schools in general, particularly for a district like ours with an older infrastructure," Finley said. Many of Denver's schools are 40 years old. Ensuring a safe environment for students and staff who use these aging buildings often creates a need for costly renovations,

"Maintaining these buildings requires an increasing pot of money" Finley said.
COPYRIGHT 2001 A.M. Best Company, Inc.
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Title Annotation:school risk managers
Comment:Reading, 'Riting and Risk Management.(school risk managers)
Author:Chordas, Lori
Publication:Best's Review
Geographic Code:1USA
Date:Apr 1, 2001
Previous Article:Overexposure.
Next Article:A New Model for Managing Risk.

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