Districts Manage Risk and Liability of Transporting Students

By Shanna Thompson | Associate Editor

It's a risky business transporting more than 24 million students to school on 450,000 school buses, but districts across the country are taking a proactive approach to keeping liability low, not only for the kids but also themselves and their transportation employees.

Risk assessment and management is an inherent aspect of student transportation, and school buses are typically covered first by a primary automobile liability program, said Nicholas Bayliss, product line manager for Lexington Insurance Company, and AIG member company. Insurance limits usually reach $1 million or $2 million but can go as high as $5 million or $10, and excess limits above the primary policy can run as high as $25 million. The primary policy covers bodily injury and property damage for bus accidents.

Attention to risk management generally focuses on the quality of the bus drivers hired, particularly experience, prior driving record and age, Bayliss said. How the school district or contractor attracts, retains and hires drivers and the particulars of the actual buses in terms of size, age and maintenance are also important.
He also stressed the importance of criminal background checks on drivers and considers them to be an "essential part of any risk management program utilized by the district or bus contractor."

"It is important to note that many primary and excess policies do not specifically exclude sexual misconduct of drivers toward passengers," Bayliss said. "(It is) typically considered an automobile exposure if such misconduct commences on the bus."

In response to the broadened liability that districts and private operators face, Lexington offers BusPlus(SM). The umbrella package offers excess auto liability insurance coverage, sexual misconduct liability coverage and liability coverage of terrorist acts.

In selecting an insurer, Bayliss said, focus should be placed on experience and an understanding of the school bus class of business should be determined. A carrier should have enough critical mass of premium and losses to develop actuarial models for pricing and produce programs that will remain stable over time.
"This benefits both the insurer and the insured and fosters strong long-term relationships," he said.

Within districts, most transportation directors say that the best protection is to establish good policies and procedures and then make sure they are followed. At Mehlville School District in St. Louis, Director of Transportation Keith Henry has representatives of the Missouri Unified School Insurance Coalition (MUSIC) conduct workshops to administrators identify losses and trends.

"Risk management is a concern for all of us," he said. "Many of the issues we deal with are not directly related to school bus operations but workplace issues that take place between employees. As for bus operations, the greatest risk is still in the loading/unloading zone."

In Missouri , 470 of the 520 schools are self insured through MUSIC. Mehlville School District transports 8,400 students on 100 buses across 1.1 million miles a year. The district has 110 transportation employees of which 92 are bus drivers.

George Ramplin, transportation supervisor at the School District of Haverford Township in Pennsylvania , estimates annual costs associated with risk management of school bus operations to be $3 million or 4.3 percent of the budget. The district protects itself with staff training, background and license checks, yearly physicals and drug testing.

To address the specific concerns associated with the redistricting on in the Havorford District, Ramplin said, crossing guards are properly placed for students walking to school and attention is paid to ensuring that bus stop locations are safe for waiting students. Approximately, 4,510 students are transported in the district on 65 buses across 686,661 miles each year.

"The demands made on transportation departments are great," he said.

Washington County Schools utilizes the Utah Division of Risk Management to identify their main liability and insurance issues, assess policies and procedures, and implement training to protect the district, said Transportation Director Launi Schmutz.

In respect to student behavior, bullying and sexual harassment have become more common liability issues than in the past, she said. The best risk management comes in the form of precedent, rules and procedures, and regular and open communication with students and parents.

The district operates 120 school buses and transports 12,000 kids daily across 4 million miles each year. Bus drivers make up 120 of the 150 transportation employees.

Schmutz pointed out that human resource issues and staff communication make up three-fourths of the daily work in Washington County School's transportation department and that basic HR procedures and management can provide protection during situations such as reprimanding a bus driver.

"I think risk management is just another arm for security and protection as a manager," said Schmutz.