Fire Insurance for Schools

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October 23, 2017 What kind of insurance do you need to protect your school in the event of fire? Here are some of the common coverages you should have. There may be deductibles or waiting periods. Be sure to ask your insurance provider to explain your coverage (and read your policies!)

Property Insurance for Building

If you don't own the building, your landlord typically provides this coverage. Check your lease to be sure which party has the obligation to buy building insurance. The insurance should cover on a "Replacement Cost Basis" rather than "Actual Cash Value" (which factors in depreciation). Check to make sure that the policy also covers the costs imposed by building code upgrades that have occurred since the building's construction date. This is typically called "Building Ordinance Coverage."

Don't Underinsure the Property! It may be tempting to reduce your premium by choosing a low building value, but you run the risk that the policy won't pay the entire cost of the repairs. When in doubt about the replacement value, work with an appraisal company. Your insurance provider can help you find one. Some policies contain additional penalties for under-insuring (co-insurance).

Pay Attention to Policy Exclusions. Some policies don't automatically cover "outbuildings" such as covered walkways, sheds, water tanks, swimming pools, sports facilities, etc. There may also be limitations on outdoor lighting, foundations, pipes, roads, and landscaping. Discuss all of this with your insurance provider so you can optimize your coverage.

Contents (Business Personal Property). Business personal property includes items like equipment and furniture. Such property can be costly to replace and should also be covered on a replacement cost basis.

Tenant Improvements and Betterments. You may have altered the leased building when you moved in. This could be new walls, fixtures, flooring - anything that the tenant causes to be permanently attached to the structure. These items won't be covered by the building owner's property insurance, so you need to make sure you establish the replacement value and report it to your insurer.

EDP (Data Processing Equipment). This is another part of your business personal property coverage that specifically applies to computers and related electronic equipment that you own. It should be inventoried and a replacement value provided to your insurer.

Extra Expense. To stay in business in spite of fire damage may require you to incur expenses that are beyond your usual operating costs. This may include the cost of a generator, portable building, rented space, etc. Extra expense insurance is usually included in your policy with a separate limit. Be sure you have it and consider the limit that you may need to stay in business temporarily - either during repairs/reconstruction or until your utility services resume (if they've been interrupted by the fire).

Business Interruption (Business Income Replacement). If you can't find a way to continue to operate after the fire and must shut down your school, you may lose funding for a period of time. Unfortunately, you will have contractual obligations and expenses that are likely to continue, even if your revenue has stopped. Business Interruption insurance replaces the lost income and enables you to continue meeting your obligations.

Emergency School Closure and Reporting Process

The J-13A form (see link below) removes the attendance data for the dates the school is closed due to poor air quality or fire danger, and credits the school with the instructional minutes to meet the minimum requirements. If your school will have a minimum of 175 days of attendance and sufficient instructional minutes without those dates (most schools use the standard district requirement of 180 days of instruction) you only need to report those 175 days - and remove the closed dates from your instructional calendar. You may need to notify the district or authorizer if this represents a change in your charter petition or MOU.

If the closed dates are needed to meet the minimum 175 days and/minutes of instruction, then file the J-13A, which covers both requirements and you will not be penalized by averaging in the zero attendance data.

Link to J-13A form: https://www.cde.ca.gov/fg/aa/pa/j13a.asp

Link to Current Statewide Air Quality Ratings: https://airnow.gov
This link also provides information on mitigating the unhealthful effects of bad air.

Fire Prevention

Fire season is still upon us and will be for some time. Here are some of steps you can take to keep the fire away from your campus:

  • Remove dead leaves from the roof
  • Trim trees so they don't hang over the roof
  • If your lawn and field areas are dry, trim them as short as possible
  • Follow the requirements of your local fire department with respect to removal of brush and vegetation around the school's perimeter
  • Ensure that the roof tiles/shingles/surface material is in good condition and covers underlying wood supports
  • Remove flammable objects such as umbrellas and canopies when fire or ash is present
  • If you have them, make sure your fire sprinkler system is up to date with inspection and certification
  • Communicate and train on your emergency fire/evacuation plan.

By CharterSAFE, which provides group self-insurance and risk management services designed specifically for California's charter schools.