The Limits of Insurance as Governance: Professional Liability Coverage for Civil Rights Claims Against Public School Districts
38 Quinnipiac L. Rev. 375 (2020)
65 Pages Posted: 15 Sep 2020
Date Written: August 8, 2020
Insurance intersects with people throughout their lives, sometimes with elements that are unobserved or misunderstood. That is often the case with “insurance as governance,” a form of private contractual regulation. This theory assumes that insurers, to minimize their financial losses, attempt to shape policyholder conduct by employing private regulatory measures, primarily through underwriting and contractual loss prevention methods. Insurance as governance is about risk reduction.
This article addresses a question regarding civil rights — do insurers influence the civil rights policies of public school districts? A broad legal arc encompasses civil rights litigation against schools, from freedom of speech complaints to sex-based claims involving students. School boards purchase professional liability insurance to defend their operational policies and actions. Previous research has not examined whether insurers attempt to shape school officials’ conduct to reduce these claims. This article finds that insurer influence is surprisingly minimal despite the financial and potential societal benefits.
Landmark scholarship (Rappaport, Harvard Law Review, 2017) established that insurers could positively influence police officer conduct, resulting in fewer civil rights claims against police entities. But this school environment research determines that insurers of public schools do not employ assertive loss prevention methods to limit civil rights claims. This lack of private regulation is because school boards want and exercise significant local control authority, and the administrators of inter-local risk pools — the leading type of insurer discussed within — have political concerns about membership stability, leading to regulatory hesitation.
This empirical study makes two main contributions. First, it involves a discussion of why insurer private regulation does not linearly increase when school district civil rights exposures rise. This contribution includes a review of the school districts’ mutual ownership of the predominant school insurer, the inter-local pool; an examination of the strong local control desires of school boards; and an analysis of the attendant political concerns of the inter-local pool administrators. Second, it reviews the policy adoption process of school boards, notes how school officials interact with and tend to resist insurers, and documents how this socio-legal setting creates insurers’ reluctance to attempt conduct-shaping with school districts regarding civil rights. This article will further private regulation scholarship regarding governmental entities and allow scholars to reassess the reach of insurance as governance.
Keywords: Insurance as Governance, Private Regulation, Professional Liability Insurance, Public School Districts, Civil Rights, Interlocal Pools, Self-insurance, School Board Policies, Loss Prevention, Underwriting, Local Control, Governmental Immunity
JEL Classification: I21, I28, K12
Suggested Citation: Suggested Citation