Insurance Gap for Superintendents Acting as Agents
Scott Simmonds, CPCU, ARM, CMC

The Problem

School Superintendents who act as an agent for a small town may not have insurance coverage for issues normally covered by educator’s liability insurance.

The Insurance Educator’s liability insurance is professional liability coverage for school boards, school administrators, and teachers. Also called “school board liability insurance,” the policy pays for “wrongful acts” in such areas as failure to educate, employment practices violations, discrimination, and violation of civil rights. Policies cover superintendents acting within the scope of their employment by the school department, district, or unit that is the named insured on the policy.

Who Is Contracting For Agent Services?Agent Contract Through School District or Department - Superintendents who act as an agent as a part of their job for an SAD, School Department, or School Union are covered by their employing unit’s school board legal liability insurance. Their actions as agent fall within the scope of their employment.

Agent Contract Directly With Superintendent - A coverage problem exists for superintendents who contract directly with a small town to act as agent. While acting as an individual, the superintendent’s district or department is not a part of the transaction. Therefore, in most cases, the school district or department’s school board liability insurance would not provide protection. Here, the superintendent is acting outside of his duties as superintendent for the insured district and, therefore, not entitled to coverage.The contracting town’s school board liability insurance may not be broad enough to pick up the contractual relationship of agent. Many policies exclude coverage for independent contractors.

The Solution The individual superintendent acting as a state agent should have the contracting town amend their school board legal liability insurance to include the position of state agent to the policy’s definition of “who is an insured." Another option is for the superintendent’s district or school committee contract directly with small-town for agent services.

Warning In all cases, the issue of state agent should be discussed with your insurance adviser. Insurance policies vary from company to company. Each insurer has their own set of policy terms, conditions, and definitions. Your adviser can help you understand how your policy works.