Creating Coverage Options

Charlie Herr
Producer
Arthur J. Gallagher, Kansas City, Mo.

The Kansas budget crisis led to a drastic cut in education funding in the state, devastating school budgets. With a single carrier accounting for up to 90 percent of the property/casualty insurance market for schools, there was little chance of any school finding premium savings. Many schools went without coverage.

Charlie Herr’s solution: introduce a risk-financing pool. Herr set up the Kansas Educational Risk Management Insurance Pool within months despite significant red tape from the state, according to Roger Miller, business manager for pool member Rose Hill Unified School District 394.

Participants in the new pool, which launched on July 1, 2015, realized immediate benefits, including: an average 26 percent reduction in premium; an average 500 percent reduction in property deductibles, including wind and hail-specific deductibles; 100 percent increases in collective liability limits, including general liability, school board legal and all other professional liabilities; and a potential dividend/surplus return of up to 13 percent of premium.

“This initial savings allowed us to hire two additional kindergarten teachers,” noted Clint Schutte, assistant superintendent for business/finance with Haysville USD 261.

“Mr. Herr has been great to work with, because he is working for us, not telling us what we should do,” observed Joel R. Lovesee, superintendent of Bluestem USD 205.

Working Tirelessly for Growth

Tyler LaMantia
Area Vice President
Arthur J. Gallagher, Itasca, Ill.

An Indiana-based insurance pool for school systems was in trouble. Growth in the pool was stagnant; coverage disputes were thorny and the program’s overall design was in question.

What better time for Tyler LaMantia, an area vice president, and his colleagues to get to work?  Hired as the program administrators for the pool for 2015, LaMantia and the Gallagher team got things straightened out. LaMantia revamped the program, resulting in coverage enhancements — including increased property limits — and aligning the policies of the two excess carriers on the program to eliminate any gaps. He also went to bat for the pool and got some coverage denials reversed.

“What makes him special is that he can relate to lay people,” said Mary Roberson, the co-chairperson  of the Educational Service Centers Risk Funding Trust.

Not only did LaMantia get the pool structured properly, he got it growing again. From 31 members when LaMantia and AJG got involved, the pool now boasts 40 members.

“He worked tirelessly for growth and that didn’t come easy,” said Roberson.

Getting a big claim reversal overturned also signaled to the pool members that they had a worthy advocate in Tyler LaMantia.

So committed was LaMantia to the pool’s success that he reached out to the chairman of the pool, while traveling, about some questions from members on the restructuring of the pool’s finances … LaMantia was out of town for his wedding at the time.

Success Under Pressure

Greg Hunter
Area President
Arthur J. Gallagher, Boston

Clients count on Greg Hunter for services that go beyond a broker’s normal call of duty, and he delivers.

A university risk manager described the complication that the school’s lawyers created for Hunter as he was finalizing the institution’s property/casualty insurance renewal.

Under the terms of a lease agreement for a school building owned by a trustee, the school, not the trustee, bore the property risk. In the summer of 2015, the trustee was closing a complex property refinancing deal “that required some rather dated and archaic insurance language on the property policy,” the risk manager explained. But university lawyers forgot to advise risk management about the language until the final day of the school’s current policy, which also was two days before the refinancing deal was scheduled to close.

“We gave Greg absolutely no time to accomplish this,” the risk manager said.

The results: “We were able to obtain the extra coverage — with a decrease in premium and a two-year rate guarantee.”

Risk managers for two other higher education institutions laud Hunter for risk management assessments he led them through at no cost. One was a tabletop drill to determine whether the college’s insurance and emergency response plans were sufficient to support students who study abroad. For another college, Hunter conducted a detailed ERM assessment and has followed up with continued support.

Michael and the Tornado

Michael Mchugh
Area Senior Executive Vice President
Arthur J. Gallagher, Itasca, Ill.

Sorting out the loss-fund contributions for a 175-member school district insurance pool can be an actuarial nightmare. Get it wrong and you create pain for school boards and superintendents.

Their pain levels are high enough already. That’s why members of the Collective Liability Insurance Cooperative think so much of Michael McHugh and his teammates.

They cite McHugh’s patience and professionalism in creating a debit/credit scenario that is fair to all parties.

“Mike is tuned in completely to the educational space,” said one risk management client.

And McHugh works every day to build that crucial sector knowledge, trying to learn about at least one new topic or add a new nugget of educational sector information weekly.

McHugh takes a paternalistic approach to his work. He looks after an education insurance pool like it’s “his baby,” according to a source, but is also willing to step in and help calm an emotional parent. Such was the case when a child was injured at a school-sponsored event and triggered a student accident insurance payment.

Even when a tornado tore the roof off of a high school, blew out windows and damaged athletic fields, McHugh and his team came through.

With just two weeks until the beginning of the school year, McHugh’s prompt service of the account meant that the roof repairs took place in just three business days.

Ninety percent of the damage was mitigated before the school year started.