Curiously, The Wall Street Journal has recently had three separate articles looking at new products being offered by the insurance industry to address emerging risks. The insurance industry has long been adept at designing products to spread the risk of burgeoning exposures. For convenience, I set out below some quotes from the stories that address key aspects of the policies.

“More Schools Are Buying ‘Active Shooter’ Insurance Policies” (Tawnell Hobbs; August 2, 2018)

“Insurance underwriter McGowan Program Administrators, an Ohio-based leader in shooter insurance, has written over 300 active-shooter/workplace violence policies for school districts, charter schools, private schools and universities across the country since 2016, when it started offering the coverage. A company official said the company issued over 60 policies in July, and that it has paid out some policies. Shooter insurance is considered gap coverage, handling expenses not typically covered under general liability, such as funeral costs and death benefits. Annual premiums can range from about $1,800 for $1 million in coverage for small school systems to about $175,000 for $20 million in coverage for larger ones. Death benefits often are offered up to $250,000 per victim.”

“To set premiums, insurers consider factors including local crime data, student enrollment and district staff levels. They also consider what safety measures the schools have in place, says Paul Marshall, managing director for McGowan’s Active Shooter/Workplace Violence Insurance Program. He also considers whether schools are monitoring social media to spot potential threats and if schools offer active-shooter awareness training to students and staff.”

“Demand For Tuition Insurance Is Surging” (Douglas Belkin; August 20, 2018)

“Liberty Mutual Insurance started offering tuition-reimbursement policies this year, in part because of consumer demand. When a student drops out mid-semester parents are often ‘very surprised to learn that you may not get anything back,’ said Michele Chevalier, a senior director at Liberty Mutual.”

“Tuition insurance protects families in case their son or daughter has to drop out of school past the point at which a school offers tuition reimbursement, usually around halfway through the semester. Driving the increased demand are higher college costs and, to a lesser extent, rising mental-health disorders among college students that have raised concerns among parents that their children may struggle away from home.” [The plans generally do not cover dropping out for academic or disciplinary reasons.]

“Big Cities Insure Against Cyber Attacks” (Scott Calvert and Jon Kamp; September 7, 2018)

[There is nothing new about cyber insurance; but here is a look at a new trend in the customer base.]

“A majority of the 25 most-populous U.S. cities now have cyber insurance or are looking into buying it, according to a Wall Street Journal survey. A ransomware attack on Atlanta earlier this year—one of the biggest reported breaches of a city’s network—served as a warning to officials everywhere of the constant barrage from hackers. Cities and even library systems are being hacked more often than people realize, but many heard about Atlanta.”

“‘Compromise is inevitable,’ said Christopher Mitchell, chief information security official, at a Houston City Council hearing last month. His presentation helped persuade local lawmakers they needed a $30 million cybersecurity insurance plan with a $471,400 premium, an example of a burgeoning trend across the country. Policies vary, but insurance can cover hackers’ extortion demands, legal liabilities, computer-forensics expertise and costs for problems like having government services knocked off line.”

“‘I wanted A to Z to have it covered,’ said Mark Barta, risk management director in Fort Worth, Texas, which got a $5 million cyberpolicy with a $99,570 premium last year. ‘I didn’t want to be in a situation on a Monday morning hearing this happened, and saying, What do I do next?’”