As California school districts work to safely reopen schools during COVID-19, the alarming specter of costly litigation looms, even as districts follow all state and local health and safety guidelines.
In this episode, Santa Clara USD Chief Business Official Eric Dill helps us wade through the murky liability waters brought on by the pandemic. We explore some basics about school district insurance and risk management, and the implications for students, educators and taxpayers of potential COVID-19 litigation. Plus, we'll hear how Assembly Bill 1384, introduced by Assembly Education Committee Chair Patrick O'Donnell, could provide much-needed, temporary legal protection for school districts during this most perilous time.
It's a matter of urgency, Eric explains, for legislators to act on AB 1384 before the legislative session ends.
"In public education, insurance dollars are public dollars. That same LCFF funding that goes to school districts to hire teachers, buy mobile devices, buy textbooks -- it's the same funding that we have to carve out for insurance," Eric says. "When our losses go up, our premiums go up, and that means fewer dollars are left for our core mission of preparing students for college, careers and the community. This is why everyone needs to be concerned when we are exposed to liability for doing what is a constitutional requirement."
MORE INFO and VALUABLE RESOURCES
ABOUT OUR GUEST
Eric Dill is the Chief Business Official in Santa Clara USD; he'll begin a new role as CBO at Santa Clara COE next month. Previously Eric served for more than 16 years in San Dieguito Union HSD in several positions, including superintendent, associate superintendent of business services, director of risk management and as a loss control analyst. He began his career in private sector risk management. He is a proud graduate of San Diego State University. He also serves on the CASBO Board of Directors. Learn more about Eric in the CASBO Career Chronicle.
ABOUT CASBO
The California Association of School Business Officialsis the premier resource for professional development and business best practices for California's school business leaders. Follow at @CASBO.
About your series guide
Paul Richman is a public education advocate and consultant. Share your feedback at edfundingca@gmail.com. Follow at @pjr100
As California school districts work to safely reopen schools during COVID-19, the alarming specter of costly litigation looms, even as districts follow all state and local health and safety guidelines.
In this episode, Santa Clara USD Chief Business Official Eric Dill helps us wade through the murky liability waters brought on by the pandemic. We explore some basics about school district insurance and risk management, and the implications for students, educators and taxpayers of potential COVID-19 litigation. Plus, we'll hear how Assembly Bill 1384, introduced by Assembly Education Committee Chair Patrick O'Donnell, could provide much-needed, temporary legal protection for school districts during this most perilous time.
It's a matter of urgency, Eric explains, for legislators to act on AB 1384 before the legislative session ends.
"In public education, insurance dollars are public dollars. That same LCFF funding that goes to school districts to hire teachers, buy mobile devices, buy textbooks -- it's the same funding that we have to carve out for insurance," Eric says. "When our losses go up, our premiums go up, and that means fewer dollars are left for our core mission of preparing students for college, careers and the community. This is why everyone needs to be concerned when we are exposed to liability for doing what is a constitutional requirement."
MORE INFO and VALUABLE RESOURCES
ABOUT OUR GUEST
Eric Dill is the Chief Business Official in Santa Clara USD; he'll begin a new role as CBO at Santa Clara COE next month. Previously Eric served for more than 16 years in San Dieguito Union HSD in several positions, including superintendent, associate superintendent of business services, director of risk management and as a loss control analyst. He began his career in private sector risk management. He is a proud graduate of San Diego State University. He also serves on the CASBO Board of Directors. Learn more about Eric in the CASBO Career Chronicle.
ABOUT CASBO
The California Association of School Business Officialsis the premier resource for professional development and business best practices for California's school business leaders. Follow at @CASBO.
About your series guide
Paul Richman is a public education advocate and consultant. Share your feedback at edfundingca@gmail.com. Follow at @pjr100
The Perils of Potential COVID-19 Litigation for California Schools With Special Guest Eric Dill
Opening Quote:
Eric Dill, Chief Business Official, Santa Clara Unified School District:
We're working as hard as we can to open up schools as safely as we can to protect our entire community -- from our students to our teachers, to our classified staff and anybody who comes on our campus – and to do that with the specter of litigation looming out there is going to cause great concern for school districts on what the financial loss might be, even if we do everything right, to be fighting claims that we might not be able to defend against.
Theme music begins.
Paul Richman, host:
Risk. Insurance. Liability. With so many worries already out there in this time of COVID-19, these are topics we wish we didn’t have to think as much about – but they could have big implications for students, schools, and taxpayers. Hi again, and welcome to “Adventures in Ed Funding,” the podcast series presented by CASBO. My name is Paul Richman. In this episode, our special guest Eric Dill, chief school business official in Santa Clara Unified School District helps us wade through some of the extremely murky liability waters that the pandemic has brought on. We’ll also hear the latest about an important legislative proposal that would provide additional, much-needed legal protection for school districts during this most unusual time.
Eric, thank you so much for joining us. We’re excited to have you on the podcast.
Eric:
My pleasure to be here.
Paul:
So, I want to sort of hit you, straight away with a big concern people have expressed as schools work hard to get students physically back onto campuses during this time of COVID-19. Let’s say a school district is doing everything it can to keep students and staff safe – they’re following all state health guidelines and county health and safety guidelines. Can the district still be held legally liable if a student or an employee becomes ill and thinks they were infected while on campus?
Eric:
Potentially, yes, because you might be in the realm of the courts, and you know, we're fighting an invisible enemy. With every new public health order, we change our practices to do the very best to protect our employees and the public. But since we can't see the virus, you can't always know where or how the exposure happened. Also, because of the incubation period, we don't know that somebody contracted the virus until several days later. So it requires that detective work by the public health department to figure out how it occurred and where, and with the statute of limitations on filing claims being 180 days after the person knew that they were harmed and then another 180 days after that to file a lawsuit, we could be talking six months to a year down the road to when we are informed that we have a potential claim and then having to go back and retrace what happened on a specific day and time. It's very difficult, it's time consuming, and it's very costly.
Paul:
We’re going to dive deeper into the costs and challenges in just a moment. But first, let’s learn a bit more about our guest, Eric Dill.
Eric:
I started at San Dieguito Union High School District back in 2001 as a loss control analyst. So I began my career in school business in risk management. And prior to that, I had worked a number of years in some private sector insurance and risk management jobs, including Six Flags Magic Mountain in their safety department. I worked for a couple of insurance carriers. I was the risk manager for a Halloween manufacturing company, and that all somehow prepared me to be a school district risk manager. And, over the years I became a director of risk management and eventually worked my way up to a chief business official at that district and now Santa Clara Unified -- heading over to Santa Clara County Office of Education soon, maybe a week or so after this podcast comes out.
Paul:
Right -- and congratulations on that, on your new position.
Eric:
Thank you. And during that time I also served on the boards of several insurance Joint Powers Authorities. So I've been on the board and on the executive committees of four different insurance JPAs and in some leadership roles, and I continue to do that as a chief business official -- so I keep myself grounded in risk management.
Paul:
Great. Well, I have to ask one more quick question on your background, since you did some work at Six Flags: have you ever been on a roller coaster like the one of the last five or six months?
Eric:
No. You know, I thought the last recession was going to be the worst one that I would see in my career and the craziest time. But that which played out over months and years has played out in within weeks here. And so this is a much more unpredictable rollercoaster with way more curves and drops and, um, screaming than what I’m used to.
Paul:
So, insurance and risk management – these are probably some of the lesser known areas of school business -- and yet they're so critical. Can you briefly give us a bit more context about the world of school insurance? For instance, what are some of the different types of coverages that school districts need to have?
Eric:
So, school district insurance looks a lot like commercial insurance. We have employees, we serve the public, we drive vehicles, we own property. We insure for workers' compensation, general liability, automobile insurance, and property insurance. The difference is that unlike businesses who go out and buy insurance policies, we tend to self-insure.
Paul:
And by self-insurance, that means essentially school districts are setting aside their own funds to be used to remedy any unexpected losses. I understand, too, that most school districts in the state join together with other districts to form what are called Joint Powers Authorities or JPAs?
Eric:
Yes, so most insurance join together in Joint Powers Authorities to pool their risk. And there's an agreement among the members that they're banding together to insure each other for certain losses. Some of the very large districts are on their own; they self-insure without any other partner districts. And while the districts are in pools at some level, they are all self-insuring. This means they're contributing to the pool to safeguard against future claims and in that pool, they have a greater ability to save on their premium costs. So, if they have few losses, maybe they need to contribute less in future years. And so that's different than commercial insurance where you pay the premium year after year after year, and if you don't have any accidents, that's great, but you don't get that money back. That's the difference that you and I might have with the insurance we buy on our cars. In self-insurance, you can project that you have sufficient reserves to cover the expected losses and maybe not pay so much into the pool next year, or maybe you’ve built up a surplus reserve -- that pool actually might return funds to the school district because it continues to be school district funds. The reason I explain this to you is to impress upon the listeners that JPA pool funds are public funds, and it's not some corporation that's carrying the risk of future claims, but these are publicly managed pools. I know every school district risk manager and CBO out there gets this, and we would rather use our limited resources towards educating our students than setting it aside to pay higher costs of lawsuits. That's why this is an important topic.
Paul:
And this approach of pooling the risk, it’s also cost effective?
Eric:
It's a very cost effective way for us to insure ourselves because we are inherently nonprofit. And so, you know, we're not paying commissions and other overhead that insurance companies have. Now, those dollars are set aside and can be used more effectively. And again, depending on how the self-insurance pool is set up, you're paying into the pool for losses that you might have over a period of time that you might expect to have at a certain level. And an actuary would look at the strength of your pool and the history of your losses and say, you're fine, uh, you don't need to contribute as much this year as you did last year because you have had a good loss history. So not only can you pay less into the pool this year, but maybe we're going to give you some of the money from the pool back. And so that's how school districts will invest in their safety program and their risk management efforts because they know every dollar they don't spend on a claim can come back to them.
Music Interlude.
Paul:
So, Eric, let’s enter back into the COVID-19 realm that we are in. When students and staff are back on campuses, what happens if an individual becomes infected or ill or worse? Would a school district’s insurance policy cover that situation?
Eric:
Every insurance policy has its own set of coverages and exclusions, so I can't answer that broadly. It all depends on the language. And you can bet that we will see that excluded in future policies, or it's going to be included in a coverage endorsement that you can buy at a higher cost. Whenever a claim is filed, if there's no coverage, then the district's general fund has to pay the legal costs in any judgments -- and that takes dollars directly away from school budgets. So, I know we'll talk a little bit about the difference between staff and student injuries or public illnesses, but [basically] if a staff member becomes ill on the job, Workers’ Compensation is usually the sole recourse for an employee. If a student or another member of the public attributes their illness to the actions or lack thereof of the school, then we'd be looking at their complaint, what they're alleging happened, figuring out if any of those causes of action are covered by the language of our memorandum of coverage. So, filing a claim against the school district because you got sick might not be covered -- but if you claim the district was negligent and that's the reason you got sick that might be covered. It's a real unknown right now.
Paul:
It sounds like step one for school districts would be making sure that they really understand what's in their current policy, what might be covered, and what might not be?
Eric:
Yes. They really need to be communicating with their joint powers authority administrators for both their liability and their Workers' Compensation coverage.
Paul:
You mentioned that for teachers and all school employees who become ill – and I’m sorry, I hate that we have to deal in these types of sobering scenarios – but in those situations, those would fall under Workers Compensation, right?
Eric:
Yes. So in California, for any workplace injury or illness, Workers' Compensation is generally that sole recourse for employees -- actually, it's a bargainable between employers and employees. The thing that has come up since the COVID-19 outbreak is now the presumption that frontline workers who contract the illness contracted it at work. So right now we have had a handful of employees who have tested positive. We've had no secondary infections, so none of those employees have infected any of their coworkers. We can control the workplace, um, we can set the standards for physical distancing, wearing masks, hygiene, sanitation, but we can't control family barbecues and we can't control what people do on three-day holiday weekends. And so that's a real concern that there's this automatic presumption that if you were required to come to work, that you must have contracted the illness at work, when we can tell through our own contact tracing that so far the employees that we've seen, have contracted it somewhere else other than the workplace. And we've not had anybody, in fact, any other person inside the workplace. So that's a real concern with us on the Workers’ Comp side.
Paul:
And where does that “automatic presumption” come from again? That's part of Workers' Compensation law.
Eric:
Yes, so there've been some amendments just recently that put in an automatic presumption that the district then has, uh, actually the employer has a burden of proof to prove that it didn't happen at work. So you have to prove a negative.
Paul:
Hmm. Right. And I know just talking to different parents and educators in the field, one of the big questions that you hear is, Well, how would you necessarily know whether somebody contracted it on a campus or somewhere else?
Eric:
That's the issue, and really the people that would know that are the public health department contact tracers. And so if we have any person who tests positive, whether it's an employee or student, we have a duty to inform the public health department. They then go through the contact tracing protocol and try to do the detective work, stepping back and [identifying] who did this person have contact with and where did it potentially come from? We have our protocols in place then that would have the person self-quarantine, or maybe, you know, they are required to stay at home, and notification protocols and all that. And it doesn't matter, you know, where they got it from, from our standpoint, if somebody was at work, we'll follow that with any close contact that they might have had in addition to providing the cleaning and disinfection that's required. But in the end, we don't know if it was through a family member, through the grocery store, through the restaurant, or, you know, any other number of places.
Paul:
We’ve talked about how things would work if a school district employee became ill. But I understand it’s a different situation if we’re talking about a student, or perhaps even a parent or volunteer. What happens if a student or parent becomes ill and they believe they contracted the virus while on campus? Can you take us through that scenario?
Eric:
You know, somebody could test positive or contract symptoms and feel that it somehow must have been related to being at school. And so, the questions are, could the parents file a claim or a lawsuit? And that answer is yes. Could the school district be held liable? Maybe. It would depend on the circumstances and how that would play out. So, what would happen? Uh, there'd be lawyers involved. There'd be courts potentially. If there is a lack of coverage, like I explained, then the biggest risk is that the JPA and the excess insurance carriers could walk away. And any judgment awarded to that plaintiff could come directly from the school district's general fund.
Music Interlude.
Paul:
Many school and state leaders have started to raise the vital issues about liability that Eric described. Because, here’s the thing: Everyone agrees that the goal for our schools is to bring back as many students as possible for in-person instruction and to do so in ways that meet COVID-19 health and safety requirements for students, employees, andcommunity members. But there remain risks and uncertainties in reopening schools during the pandemic. The virus remains unpredictable. Even if schools and local education agencies follow all state and local health requirements and guidance, the recommendations themselves continue to change. Schools are not able to guarantee that no individual with COVID-19 will enter a school site or transmit the virus. And that means school districts may be exposed to liability and costly litigation.
Enter Assembly Bill 1384, authored by Assembly Education Committee Chair Patrick O’Donnell. The bill would provide temporary and narrow legal protection for school districts from claims and lawsuits resulting from COVID-19 when districts are following all of the health and safety guidance. The bill would help keep already scarce resources in the classroom and help districts to safely resume in-person instruction.
Eric:
As I mentioned before, school districts take taxpayer dollars meant to educate students and we set that aside to insure ourselves against litigation. When the number of lawsuits and the value of payouts increases, that means more Proposition 98 dollars, more Local Control Funding Formula dollars need to be pulled off the top to pay legal costs before we can even think about hiring another teacher or giving another Chromebook to a student who needs it. This is why AB 1384 is so important. School districts are providing a vital public service. When the shelter in place orders went into effect, we sent our students and staff home just like all other employers. But we recognize that California will not get back to normal until kids are back in school. What AB 1384 does is protect schools that are putting best practices into place and making good faith efforts to prevent the spread of the disease while still providing one of the most essential services our government offers.
Paul:
And I want to underscore that, too: This in cases where districts really are putting best efforts forward at safety?
Eric:
Precisely. And we have all responded as best as we can. And we have developed plans. We've put them into action. We have educated our employees. We're informing the public. We are putting a high value on safety and following the rules. And that's why we've been successful with our frontline workers who have been, in particular, our nutrition services employees, who have worked nonstop. And our district has provided over a million meals to our community. And we have done that safely. And so those districts that are doing a good job and following the rules need to be held harmless in the event that despite all of our best efforts, somebody contracts the illness.
Paul:
More than 230 statewide associations and local education agencies have signed on in support of AB 1384. In addition to Assembly member O’Donnell, the bill has 15 coauthors from the Senate and Assembly, many who are former teachers or administrators. And yet…As can sometimes happen in Sacramento, despite all the interest and support, as of the release of this podcast episode, AB 1384 has still not been set for a hearing in the Senate Judiciary Committee – and time is quickly running out on the legislative session. A few days ago, more than 40 state legislators cosigned a letter urging the senate judiciary committee’s chair to set a hearing for the bill.
So, this is sort of a straight up question, but should we really be talking about restarting in-person class without addressing this, this liability issue?
Eric:
Those two things need to be happening in tandem. And that's why I think the Senate judiciary Committee needs to give Assembly member O'Donnell's bill a hearing and pass it onto the floor to guarantee that the funding Californians provide for schools goes towards this noble purpose of preparing the next generation of students to be productive and well-informed members of society.
Paul:
A quick note: Please check our Show Notes for links to the latest information about AB 1384. Also, if there are any updates or new calls to action, we’ll share those out in a special episode with the CASBO Governmental Relations Team, Sara Bachez and Elizabeth Esquivel, to bring you up to speed.
So, Eric, before we wrap up, I wanted to ask you about another scenario I’ve heard people discussing. Let’s say we have a student on campus and they've taken off their mask for a while – and then they wind up becoming infected. Is that a situation where a district could be found liable?
Eric:
The answer is always “maybe.” The question will be, what practices did the school have in place? Were they aware that the student was going to take off their mask? Did they see the student without the mask? What did they do about it? But the other side of that argument might be, what behaviors were outside of the school's control that might have led to the infection, Specifically to communicable disease transmission, I've not seen a single claim on this in my 20 years in schools. You know, we don't know how this is going to play out, but my guess is there's a lawyer in California right now working with an ad agency on how to find clients for this.
Paul:
Mmm. So, in a lot of ways, this is really school districts trying to be very proactive on behalf of their communities, on behalf of taxpayers in getting the legislature to address this now?
Eric:
Yes. You know, we're, we're working as hard as we can to open up schools as safely as we can to protect our entire community and to do that with the specter of litigation looming out there is going to cause great concern for school districts on what the financial loss might be. Even if we do everything right, uh, to be fighting claims that we might not be able to defend against.
Paul:
Right.
Eric:
There's a perception out there that school districts just have insurance and the insurance companies will pay whenever they have losses, but in public education, insurance dollars are public dollars. That same LCFF funding that goes to school districts to hire teachers, buy mobile devices, buy textbooks -- it's the same funding that we have to carve out for insurance. When our losses go up, our premiums go up, just like in the real world. And that means fewer dollars are left over for our core mission of preparing students for college, careers and the community. And this is why everyone needs to be concerned that when we are exposed to liability for doing what is a constitutional requirement in this state, to provide a public education, that we cannot suffer that harm of exposure to litigation and liability for doing what we are required to do.
Theme music begins.
Paul:
Well, that’s where we’re going to leave things for now. Many thanks to you for joining us on Adventures in Ed Funding, the series presented by CASBO, the California Association of School Business Officials. Jamie Dial is the president and Tatia Davenport is the CEO and executive director. And a big thanks again to our guest Eric Dill, for sharing his expertise – and best of luck in your new position at the Santa Clara County Office of Education, Eric!
As always, you can find out more on the CASBO website and in our Show Notes – including a link to a recent webinar about risk management and COVID-19. My name is Paul Richman, and I’m your faithful series guide. The one and only Tommy Dunbar handles all of our music, sound and editing. Until next time, don’t forget to do your part to limit those risks.
Questions about AB 1384? Please contact Elizabeth Esquivel, CASBO's Senior Director of Policy and Governance.
Feedback about the podcast series? Suggestions? Email the host, Paul Richman, at EdfundingCA@gmail.com.