The following story regarding the Minneapolis Public School District and liability
insurance coverage appeared in the September 10, 2003 POLITICS IN MINNESOTA
newsletter. I have been given permission to reprint.
Bill Dooley
Kenny
Mpls Schools Drop Liability Insurance Coverage
The "no new taxes" mantra may now be dictating the liability
insurance coverage or lack of it in Minnesota's largest public
school district. In a matter being carefully watched at the
State Capitol, the Minneapolis Public School District is be-
lieved to have dropped its liability insurance coverage, relying
instead on a 40-year-old statute. The interest is prompted by
the realization that, in some instances, individuals, corpora-
tions and organizations have decided to drop their liability
insurance coverage in order to stem the possibility of poten-
tial lawsuits. The thinking behind this tactic is that lawyers
will be disinclined to file suit if they know that there is no
insurance money to cover acts of negligence that may cause
injury to others.
There is, however, some equivocation about
the insurance coverage within the school system. Two differ-
ent sources within the Minneapolis public schools have two
different positions on the matter. The district's Acting Super-
intendent, former Speaker of the House Dave Jennings, says
it is proceeding into this school year as "self insured". That's
not what the district's law firm believes. The firm represent-
ing the Minneapolis Public Schools says the Minneapolis dis-
trict is not self-insured. A check of the Minnesota Depart-
ment of Commerce indicates that the Minneapolis schools have
filed a document with the state indicating it is "self-insured"
when it comes to liability coverage but only for its vehicles.
Now, that may be comforting to anybody unfortunate enough
to get run over by one of the district.s cars, but it doesn't give
much solace to a family with a child in the school system that
may be the victim of abuse at the hands of a school employee.
To us there seem to be endless possibilities for injuries that
could be suffered by kids in a wide array of activities from
athletics to shop while in the care of the school system. That
would include such things as playground accidents; food poi-
soning; teacher negligence causing injury to kids, hallway in-
juries, etc.
As it appears to stand now, with the school dis-
trict dropping its liability insurance coverage and not being
self-insured, except for its vehicles, any major liability claim
could result in a multi-million dollar judgment that could force
a huge tax increase with none of the money going into the
education of Minneapolis children. This situation could arise
because federal lawsuits might not be subject to the 40-year-
old state statute due to federal preemption.
While we just learned of this, it isn't exactly new:
A check of the public
record indicates that the Minneapolis school district has not
had liability insurance coverage since the school year of 2001-
2002. The reason for dropping the coverage-like a lot of
decisions in public education-is apparently based on a de-
sire to cut costs. As a public policy matter, the Legislature
has already decided, as a matter of public policy, that it is
more responsible to have liability insurance than to go with-
out. Thus, every driver in our state, unlike some other states,
is required to maintain insurance coverage. It would seem
that with the public record abounding with the belief that car-
rying liability insurance coverage is the public policy, then the
question arises: Why should the Minneapolis Public Schools,
or any school district, be able to drop such coverage? Our
review of the current practices reveals that every school dis-
trict in the state, except Minneapolis, has decided to maintain
liability insurance.
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