United Educators Study Tracks Rising Cost of Education Sector Liability Losses

United Educators' 2023 report reveals escalating financial risks in education due to rising liability claims, emphasizing the need for robust risk management.
By: | March 6, 2024
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An analysis of major awards and settlements in 2023 involving K-12 schools and higher education institutions finds that both the size and number of payouts over $1 million is increasing, according to an analysis by United Educators.

United Educators (UE), a reciprocal risk retention group that provides liability insurance to its members, gathers publicly reported information about major awards and settlements to identify liability trends. UE noted that most losses in the report do not involve UE’s members.

The UE report indicates an increase in the number of such awards or settlements from 2022 and a significant rise from 2021. The total dollar amount of losses of at least $1 million reached $651 million in 2023.

“This trend underscores the impact of social inflation on education claims, characterized by a high escalation of settlements and defense costs,” the report stated.

Out of the reported settlements or awards of at least $1 million:

  • 22 involved sexual misconduct
  • 8 were related to accidents and crimes resulting in death
  • 8 pertained to discrimination
  • And 8 were linked to COVID-19.

“While incidents involving sexual misconduct have caused large losses for many years, discrimination claims also continue to be a major risk. Discrimination is tied for the second-most common publicly reported settlement or award listed in this year’s report,” stated Joe Carter, UE Vice President of Business Development and UE Experience.

The report also provides a breakdown of publicly reported settlements and awards over $1 million.

Higher education institutions accounted for $175.7 million of the 2023 total, with the largest claim of $39 million against the University of California, San Diego. According to the report, UC San Diego was ordered to pay more than $39 million to a former university doctor who alleged the university tried redirecting a $10 million gift for his research into a general gift to a cancer center and that the university retaliated against him when he spoke up.

K-12 claims over $1 million included in the report totaled $478.8 million, with the largest claim of $121.5 million against the Moreno Valley Unified School District in California. According to the report, the school district must pay $121.5 million following a jury award to two former students who were sexually assaulted by a middle school teacher about 30 years ago.

The report’s findings highlight the escalating financial risks faced by educational institutions due to increasing liability claims.

“K-12 and higher education members experience the types of losses described in this report,” UE stated in the report, noting that from 2017 to 2022, the average cost doubled for UE members’ primary general liability (CGL) and educators legal liability (ELL) claims.

For more details, download the United Educators report. &

The R&I Editorial Team can be reached at [email protected].

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