School and educational institutions, from daycare centers to colleges and universities, are facing increased premiums and reduced coverage options as evolving insurance challenges are creating an impact on operations and financial health.
“The insurance market for educational institutions remains challenging in 2025, with property, general liability, professional liability, and directors and officers (D&O) coverage experiencing continued hardening," says Kyle Dean, President and CEO of Dean & Draper.
Educational organizations unique insurance challenges include everything from intensifying cyber threats to sexual assault and misconduct exposure to civil unrest and protest concerns to active shooter and trauma loss coverage.
The limited number of insurers for educational institutions has further complicated matters, with several high-profile companies having exited the market in recent years. This trend underscores the importance of working with an experienced insurance broker such as Dean & Draper who can navigate these challenges effectively.
Cyber Crime, Active Shooters, and Emerging Risks for Education
Emerging risks for educational institutions lurk in the school hallways and classrooms with active shooters, trauma losses, and sexual misconduct concerns to online threats where IT staff must defend against data breaches and ransomware attacks.
Cybersecurity Concerns Intensify
As educational organizations become increasingly reliant on technology, they face growing risks from cyber threats. Recent data shows that the education sector remains a prime target for cybercriminals.
“2024 saw an escalation of cyber attacks on the critical education sector,” cyber security software company Check Point said in its “The State of Cyber Security 2025” report. “Out of all sectors, the education sector has been hit hardest, suffering an alarming 75 percent year-over-year rise to 3,574 weekly attacks, as cyber criminals exploit the vast troves of personal data held by schools.”
Educational organizations must ensure their insurance coverage includes robust protection against these evolving cyber risks, including coverage for data recovery, business interruption, and reputational damage.
Active Shooter and Trauma Loss Coverage
Sadly, the need for active shooter and trauma loss coverage remains critical for educational institutions.
Insurance providers are offering more comprehensive policies that cover not only physical damage but also mental health support, crisis management, and community recovery efforts.
"We're seeing a trend towards more holistic coverage options that address the long-term impacts of traumatic events on educational communities," Dean explains. "This includes coverage for counseling services, security upgrades, and even relocation expenses if necessary."
Sexual Misconduct and Title IX Claims
The rise in sexual misconduct claims and Title IX violations continue to pose significant challenges for educational institutions.
“The Large Loss Report 2024 found that of 71 public reported settlements or awards of at least $1 million, 22 involved sexual misconduct,” said Dean. “Awards can be high in these cases with awards last year of $121.5 million, $52 million, and $50 million against two school districts and a boarding school.”
The increasing number of sexual misconduct claims against educational institutions has led to a stricter underwriter process and higher premiums for many schools and universities.
Complicating matters, many states have moved recently to lengthen the statute of limitations to report such crimes or remove the limitations altogether.
Educational organizations need to prioritize risk management strategies and ensure comprehensive coverage to address these sensitive issues effectively.
Emerging Insurance Challenges in Education
While the above trio of topics captures the headlines, there are other emerging insurance challenges in education including the student mental health crisis, environmental liability, AI and data privacy concerns, and the risk of campus unrest.
Student Mental Health Crisis
The ongoing student mental health crisis presents a growing concern for educational institutions. Insurance providers are developing new products to address this issue.
The Student Behavioral Health Report by United Healthcare shows that over 77 percent of college students have experienced at least one significant mental health issue in the past year, including stress, anxiety, or depression.
The insurance industry is playing a role in addressing the mental health crisis:
- Student health plans are expanding coverage for mental health services.
- Insurance providers are offering risk management resources to develop behavioral and mental health intervention teams.
- Some insurers are providing premium credit to institutions that implement comprehensive mental health support programs.
Environmental Liability
With increasing focus on environmental issues, educational institutions face new liability risks related to sustainability and environmental impact.
The growing array of environmental risks includes:
- Indoor air quality issues, particularly mold and legionella in dorms, classrooms, and recreational facilities.
- Chemical exposures form labs and cleaning agents.
- Pollution from historical operations and campus redevelopment.
- Emissions from ventilation systems.
- Wastewater discharge concerns, especially for carcinogenic, pathogenic, and infectious materials.
- PCB contamination in older building materials.
- Risks associated with underground storage tanks and generators.
Educational institutions seeking environmental liability coverage should demonstrate proactive risk management and practices to insurers.
Artificial Intelligence and Data Privacy
The intersection of artificial intelligence (AI) and data privacy has become a critical concern in 2025, particularly in educational settings.
As AI technologies continue to advance and proliferate, they bring both opportunities and challenges for protecting sensitive information.
Schools must protect personally identifiable information in education records while dealing with increased data collection by AI systems.
Insurance policies are evolving to cover issues such as AI-related privacy breaches.
Civil Unrest and Protest Concerns
Recent events have highlighted civil unrest and protests as a significant emerging insurance challenge for educational institutions.
The wave of campus protests in 2024 and early 2025 has created new risks and potential liabilities for colleges and universities.
"We've seen a marked increase in civil unrest on campuses, with protests sometimes leading to property damage, disruptions to academic activities, and even the cancellation of major events like graduation ceremonies," Dean notes. "This has prompted a reevaluation of insurance needs for educational institutions."
Key insurance considerations for civil unrest and protests include:
- Property damage coverage: Policies may need to be reviewed to ensure they adequately cover damage resulting from riots, civil commotion, or vandalism.
- Business interruption insurance: Coverage for lost revenue due to campus closures or event cancellations has become increasingly important.
- Liability coverage: Institutions may face claims related to their handling of protests, including allegations of excessive force or violations of free speech rights.
- Event cancellation insurance: Specialized coverage for major events like commencements has gained relevance as protests have led to cancellations.
As the landscape of campus activism continues to evolve, educational institutions must remain vigilant and adaptable in their approach to insurance and risk management related to civil unrest and protests.
Traditional Insurance Concerns Persist
While new challenges emerge, educational organizations must continue to address longstanding insurance needs:
- Transportation Risks: With the return to in-person learning, transportation risks have come back into focus. Educational institutions need to ensure their coverage adequately protects against these risks, especially given the current shortage of qualified bus drivers in many areas.
- Sports Liabilities: The landscape of sports liability continues to evolve, particularly concerning concussion-related claims. Educational institutions need to review their coverage to ensure they're protected against these evolving risks. On the college level, last year saw the NCAA’s $2.8 billion settlement with former college athletes that will help compensate them for lost earnings under their name, image, and likeness (NIL).
- Natural Disasters: The increasing frequency and severity of natural disasters due to severe weather patterns poses significant risks to educational institutions. This includes damage from hurricanes, floods, wildfires, and other calamities. The insurance risks can be as extreme as the weather with 9 school campuses having been lost or seriously damaged because of the Los Angeles wildfires in January 2025, and 1,000 schools were closed due to the wildfires at some point.
Rising Costs and Risk Management
The ongoing challenges of inflation and supply chain disruptions continue to impact the insurance needs of educational institutions.
"Construction and repair costs remain elevated in 2025, which affects both property insurance premiums and claim payouts," Dean notes. "Educational organizations need to regularly reassess their property valuations to ensure they're adequately covered in the event of a loss."
This situation has led to an increased focus on risk management and loss prevention strategies. Many insurance providers are offering incentives for educational institutions that implement robust risk management programs.
As the insurance landscape for educational organizations continues to evolve, it's crucial for these institutions to work with experienced insurance brokers like Dean & Draper who understand their unique challenges.
Contact Dean & Draper today to make sure you have the right insurance coverage to protect your institution, students, and staff.
The recommendation(s), advice, and contents of this material are provided for informational purposes only and do not purport to address every possible legal obligation, hazard, code violation, loss potential, or exception to good practice. Dean & Draper Insurance Agency specifically disclaims any warranty or representation that acceptance of any recommendations or advice contained herein will make any premises, property, or operation safe or in compliance with any law or regulation. Under no circumstances should this material or your acceptance of any recommendations or advice contained herein be construed as establishing the existence or availability of any insurance coverage with Dean & Draper Insurance Agency. By providing this information to you, Dean & Draper Insurance Agency does not assume (and specifically disclaims) any duty, undertaking, or responsibility to you. The decision to accept or implement any recommendation(s) or advice contained in this material must be made by you.
The recommendation(s), advice and contents of this material are provided for informational purposes only and do not purport to address every possible legal obligation, hazard, code violation, loss potential or exception to good practice. Dean & Draper Insurance Agency specifically disclaims any warranty or representation that acceptance of any recommendations or advice contained herein will make any premises, property or operation safe or in compliance with any law or regulation. Under no circumstances should this material or your acceptance of any recommendations or advice contained herein be construed as establishing the existence or availability of any insurance coverage with Dean & Draper Insurance Agency. By providing this information to you, Dean & Draper Insurance Agency does not assume (and specifically disclaims) any duty, undertaking or responsibility to you. The decision to accept or implement any recommendation(s) or advice contained in this material must be made by you.