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Director of Risk Management
Denver Public Schools
Denver

A risk manager pushes his RMIS to extract enough data to keep track of students in need of help or serious disciplinary attention.

No organization can manage what it cannot count. That is the core belief that led Stephen Finley, director of risk management for Denver Public Schools, to do something that few are brave enough to attempt: tinker with software. Most people are happy to have their hardware and programming do most of the things for which they were intended.

Not so with Finley. He needed to track troubled children not just through grades but through the entire Denver school system. The students most in need of consistent support or monitoring are also those more likely to be shuffled around, class to class and school to school.

So Finley took his CS STARS software, a standard risk management information system sold by a subsidiary of Marsh, and used its modification features--parts of the program used to track claims--to track school children.

Denver Public Schools serves more than 75,300 students of the city and county of Denver. The district's staff includes 4,500 teachers and 6,700 full-time employees who work out of 152 schools and administration buildings.

The diversity and transience of the student population factored heavily into the need to track and measure threats of violence and even suicide.

By following students through a districtwide system, prior encounters are easily seen, allowing trained district staff to have a broader amount of information to deal with students and their families who need help.

"The STARS system is highly customizable," said Marla Stone, account executive for STARS. "So Stephen did not have to do any heroic custom programming, but other users tend to use the modules to do things like manage their trucks. I have never seen anything like what Stephen is doing."

As a true innovation, tracking troubled kids across the entire school system using a common, comprehensive system is paying dividends and has the potential to spawn entirely new approaches to personnel risk management in the long run.

"Stephen has already had cost reductions by using the system," said Stone. "Those kids who have been the victims of abuse or violence at an early age may end up as bad actors later. With the historical perspective he is getting, Stephen will be able to see those correlations."

Of course, long-term vertical studies in education and other organizations are common but require a lot of funding and extensive planning by researchers. By modifying a relatively common system, Finley has made it possible for any teacher, administrator or other school-system member to enter data relevant to any event at school.

"Event management is no different than claims management," said Finley. "I'm not a software developer, I am a risk manager, so I wanted to be able to track events easily by customizing input screens in STARS." He prefers the term "event" to the term "incident" because often an instance of bullying or threatening might not rise to the incident level.

School districts are required to report other high-risk events such as cases of child abuse; however, there is no mandatory requirement for reporting threats of violence or suicide. which makes it more challenging to achieve adoption of an optional system.

"We do a good job of responding in the schools to events, but we have not done a good job of tracking them," said Finley. "So I ginned up a little input screen in STARS." Some people had been using spreadsheets to try to track events, he noted, but that is static, little better than recording things on paper.

He added that even the spreadsheet efforts are isolated. "For the most part keeping track of troubled children is a matter of memory." A teacher knows what goes on in her class, but not necessarily what happens at lunch or gym.

"We are trying to manage the latent risks," Finley said. "We are trying to identify the kids that make threats or are actually violent, and put associated data with that. It's so much easier than trying to compile paper files."

--By Gregory DL Morris

President & CEO
Hays Cos. of Illinois
Chicago

Vice President, Property/Casualty
Educational & Instructional Insurance Administrators
Chicago

With B.I. coverage triggered only with a property loss, institutions find a way to protect themselves even when no property is at stake.

Chicago is the biggest small town in the country, a place where people can rely on their neighbors. And so it was when the Educational & Institutional Insurance Administration, an association of 233 Protestant colleges and universities, needed coverage in case one of its member institutions had to close because of violence or an outbreak of illness.

No such coverage existed in the market; business-interruption insurance is triggered by a property loss and would not apply if students and faculty had to stay off campus.

After a search by EIIA, the Hays Cos. brokerage came calling after EIIA's property business and were offered the challenge of pandemic coverage. Hays is based just a few blocks from EIIA in the heart of downtown.

"First, we came up with a general outline of terms and took that to the market, along with some prices," said Kerr. "It was such a large potential loss that most underwriters had shied away from this type of coverage in the past, but we put the client's specifications into a document that made it easy for carriers to size up loss versus probability."

Berkshire Hathaway agreed to write the coverage with an unusual three-and-a-half-year term to spread the premium over a manageable period for the insureds, which are the 128 members of EIIA.

"Carl Hahn, our senior vice president wrote the policy, and Jim Finch worked directly with the underwriters to get agreement on triggers and prices," said Hays account executive Georgia Olsen. "But the major factor was input from the client."

Mary Ellen Moriarty, vice president of property and casualty at EIIA, said her advisory council came up with the idea after one member institution, Ferrum University in Ferrum, Va., was approached by its municipality about being a possible quarantine site for the avian flu in 2005. "Bobby Thompson, the risk manager at Ferrum, called me to ask if his business-interruption insurance would cover him," said Moriarty.

"I checked and told him no, but to ask if the city would indemnify him," she continued. "He checked, and they said no. So we took the problem to our advisory council. Soon after that, the shooting took place at Virginia Tech, and we realized that there were many hazards that could shut us down without a property loss. It could be a global pandemic, or a campus incident, violence, contamination or food-borne illness."

Not long after the policy came into effect, it was almost triggered by the H1N1 flu. "We had a bit of a test run with the swine flu," said Moriarty. "That really caused us to think about the threats. With a World Health Organization rating of 5, there were very strict protocols for us to collect on the policy. But once WHO went to Level 6 for the H1N1, all the hoops are gone. If the virus comes back this fall--and we pray that it won't--we would still have to prove a financial loss, but otherwise are free and clear." Many carriers exclude swine flu, so similar coverage would not be available elsewhere, she noted.

"The potential loss for the colleges and universities is if they would have to cancel classes or even just some programs and return tuition money or fees," said Olsen. "We could not get anyone to write this coverage for us, so we had to find another way to get our clients protected."

Coverage triggers vary depending on the type of hazard but generally are built around a percentage of students and faculty who must stay away from campus for several days.

The policy was crafted for colleges and universities, but it could be applicable to other public and private institutions, pools and associations, she said. Siri Gadbois, president of EIIA, recommended that participating institutions purchase the coverage, she added.

In negotiations with Berkshire he developed the concept of front-loading premium to allow for an institution's budgets to catch up to the premium costs.

--By Gregory DL Morris