PTO Risk and Insurance

School Business Administrator's fulfill many roles associated with titles that have entered the mainstream in the private sector such as, Chief Financial Officer (CFO), Chief Operations Officer (COO), and Chief Information Officer (CIO).  In addition to these functions a growing area of our responsibility is that of risk avoidance working in partnership with a district Risk Manager to protect against potential liability ranging from use of facilities to storm preparation and disaster recovery.

One particular aspect of this growing concern is related to PTO/PTA activities involving our schools and support groups.  Perhaps the biggest fallacy is that of insurance coverage afforded to PTO/PTA's through the school district.  While Some PTO/PTAs are protected under the school's blanket policy, that is not the case for many activities.  According to the Risk Manager the first line of defense is to have specific events and actions reviewed by the district and in fact approved by the Board of Education in the minutes of a regular meeting.  This recognizes the activity as a "Board Sponsored Event" and minimizes attempts by the carrier to disallow or challenge afforded levels of coverage consistent with the policy.

Very few School Districts in the country provide coverage for PTO activities. In fact, it is a well known and proven method of loss control for the School District to require all groups using School District facilities carry at least $1,000,000 of General Liability and name the School District on the PTO policy as an Additional Insured. Of the few School Districts which do actually insure some PTO events, it is only with prior approval for a specific event. Also, the School District coverage will not extend to any PTO activities off campus.

 

Keep in mind that of the more than 15,000 public school districts, less than 5% provide insurance coverage for PTO activities and then only over and above a very large deductible such as $500,000 or $1,000,000 which the School District, as a municipality, can afford to pay and which the PTO cannot. (source: RV Nuccio & Associates, Inc.)

That said, some events such as those serving or providing alcohol are prohibited by Board policy and place individuals within the PTO/PTA organization at risk of personal assets including their home.  For that reason it is recommended that PTO/PTA secure direct coverage for specific events called, "Event Insurance" that provide coverage to include 'Liquor Liability'.

A recent policy obtained by our High School PTO for such an event, "Dine Around" dinner fund raiser afforded that group General Aggregate Insurance in the amount of $3 million for only $93.75.  As a BA, I call that a serious return on investment (ROI).