Educational Institutions Reported $1.2 Billion in Large Losses Despite Fewer Claims

Educational institutions reported fewer large legal awards and settlements in 2025, yet substantially higher overall costs for those losses, according to the United Educators’ Large Loss Report 2026.

While UE’s report documented 41 damage awards and settlements of at least $2.5 million nationwide last year from public records—down from 54 in 2024—the aggregate amount of those losses surged to $1.2 billion, up from $863 million the previous year and $601 million in 2023.

Higher education institutions absorbed the lion’s share, accounting for $909 million in losses, while K-12 schools faced $203 million. The trend underscores a troubling reality for school leaders and risk manager, the report said: each claim is becoming exponentially more expensive, even as the frequency appears to stabilize.

Social Inflation and Shifting Jury Dynamics Drive Costs Upward

Several interconnected factors are fueling this dramatic increase in litigation expenses. Social inflation—the rising cost of claims beyond standard economic inflation—continues to reshape the liability landscape for educational institutions. Rising attorney advertising, third-party litigation financing, expanded legislative frameworks, and institutional mistrust all contribute to the mounting pressures.

“Increased litigation, broader contract interpretations, plaintiff-friendly legal decisions, and escalating jury awards and settlements continue to drive rapidly increasing claims costs across the liability sector for education,” the report said.

While most of the losses detailed in the report do not involve UE’s K-12 and higher education members, its members do experience the types of losses described in this report, UE noted. UE closed more claims of $2.5 million or greater in 2025 than it has in company history, continuing that trend from 2024, the report said.

Defense costs alone tell a compelling story. For UE members, the average cost of primary general liability and educators legal liability claims nearly doubled between 2019 and 2024, significantly outpacing other cost drivers.

Sexual Misconduct Claims Dominate Losses

Sexual misconduct allegations represent the most significant driver of large losses, accounting for 17 of the 41 settlements and awards documented in the report. Among K-12 institutions specifically, sexual misconduct involvement was even more pronounced, appearing in 16 of 23 large losses.

A legislative shift has amplified this trend. Multiple states have passed laws permitting survivors of childhood sexual abuse to pursue civil claims beyond the traditional statute of limitations, effectively reopening decades-old cases. Of the 17 sexual misconduct-related settlements and awards, all but three involved alleged misconduct that occurred more than 10 years prior.

Obtain the full report here. &