Back-to-School (Risk) Basics

While the loss of these personal items and the associated expenses may not produce financial mayhem for the affluent parents of a child at boarding school, the expense of a liability lawsuit resulting from the abuse of social media may be more troublesome. When a child uses social media to shame a fellow student or teacher and makes defamatory or libelous remarks that may go viral, it could result in a potential lawsuit for parental liability.

More than half of adolescents and teens have engaged in cyber bullying or have been bullied online at about the same percentage. The emotional consequences of such hurtful activities can be grave, from lower self-esteem to suicide. The latter situation may also result in both criminal and civil lawsuits against the parents of the alleged cyber bully.

Review Coverages and Responsibilities

It’s when children reach college age and beyond — really into early adulthood when they may be attending graduate or medical school — that people need to be aware of their coverage. “Depending on the age of the student, most undergraduates are still considered members of the household and are covered by their parents’ insurance policies,” Signorelli said. “The greater issue is once students have graduated from college but haven’t returned home. There is a misconception that if they are still being supported by their parents, regardless of the fact that they no longer live in the household, they are covered under the parents’ policies. That’s not always the case. There are important adjustments that need to be made to their insurance coverages to properly protect the parents and the young adult, such as purchasing a renter’s policy and making adjustments to their auto insurance. It is important that the parents notify their agent, and equally important that they have a knowledgeable agent who can provide accurate consultation about changes that should be made.”

As students prepare for college, parents also should remind their kids about responsible living while they are on or off campus and away from home. For example, in one incident, a drunk student fell off the deck of an insured student’s off-campus home and was paralyzed.

Although most parents’ insurance policies, assuming adequate limits augmented by an excess liability or umbrella insurance policy, would address these costs, Signorelli noted that every policy has a definition of a household member and who is covered by it. “Our biggest worry is when a client’s children are no longer in the household, and we have not been notified to make the necessary coverage adjustments,” Signorelli said.

The day before we spoke, Signorelli received a call from one of her clients regarding his son, who was moving from his university dormitory into a house with four other students. Landlords often require that parents co-sign the lease on the house, but this comes with risk. The father wanted to know if all the parents should participate in buying a renter’s insurance policy, since he decided to be a co-signor on the lease.

“I explained to him that if his name is on the lease, he is liable for resulting property damage and bodily injury,” Signorelli said. “I also pointed out that the ‘best practice’ was for all the parents to buy separate insurance policies; this way each policy would participate in the potential loss payment if all the kids are named in a lawsuit.” She adds that it’s relatively inexpensive to increase the liability limits of a renter’s policy in order to provide adequate protection.

For high-net-worth parents whose children are headed to boarding school and college in a few days, now is a good time to sit down with a specialized insurance agent like Signorelli to discuss the ABCs of risk management and insurance. Anything can happen while a youngster is away at school. Protect your educational investment, while ensuring your child’s safety.