Budget & Finance

Why Failing to Require Masks Could Cost Districts Millions Later

By Mark Lieberman — August 20, 2021 | Corrected: August 24, 2021 9 min read
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Corrected: A previous version of this story misstated the name of the school district for which PJ Caposey serves as superintendent.

Insurance providers in recent weeks have warned school districts that they may not provide coverage for pandemic-related lawsuits this school year, according to district leaders and school board members in several states. Insurers are also threatening to entirely drop districts that fail to follow public-health mandates, such as states’ requirements that all students wear masks.

The pressure for districts to follow prudent public-health procedures is mounting, and the stakes are high. If an insurance provider refuses to cover pandemic-related claims, a district would be on the hook for all related expenses if a parent claims in court that their child got sick because administrators failed to follow a public-health mandate. If the district loses its insurance altogether, a lawsuit on any matter, such as a teacher injury on the job, could have that effect.

In places where parents and state officials have different views on masks and other protocols in schools this year, superintendents and school board members are caught between risking severe financial risk for their district or ignoring the will of the community.

“Everyone has an idea of what the guidance should be. But insurance companies have the power to say, ‘We won’t cover you,’” said Helio Brasil, the superintendent of the Keyes Union school district in California. “There’s a veto power there, and I’m back at ground zero.”

Widespread fatigue with COVID-19-related health protocols, conflicting guidance from health agencies, and growing uncertainty over the particulars of the Delta variant are among the factors making insurance providers—particularly those that aim to turn a profit—reluctant to commit to coverage for pandemic-related claims districts might face.

“Communicable diseases can swarm an entire world leading to bankruptcy of carriers and their reinsurers,” said Geoffrey Sinclair, an Oregon-based insurance agent who works with dozens of school districts. “That is not a business model that insurance carriers or their shareholders are interested in providing.”

Districts spend anywhere between $130 and $160 per student or 1 to 5 percent of their annual budget on insurance coverage, which protects them financially in the event that property or equipment gets damaged, workers get injured, or the district gets sued. The pandemic, which has led to hundreds of educators’ deaths, outbreaks among students and staff, and political debates over health protocols, has placed additional pressure on the school insurance industry. Providers have also weighed in on issues like quarantine guidance for COVID exposures, and distancing protocols.

Private insurance companies or risk pools of public institutions offer guidance, and sometimes set limits, on what schools can do without fear of being penalized or sued.

Superintendents don’t want to burden their community with the consequences of lawsuits

PJ Caposey, the superintendent of the Meridian school district in Illinois, has been struggling to explain to parents in his community why he’s requiring all students this fall to wear masks inside school buildings.

Earlier this summer, the district had planned to make masks optional. Even when public-health agencies were strongly recommending masks, Caposey held firm.

That changed on Aug. 4, when Gov. J.B. Pritzker issued a statewide mandate for universal masking in schools to combat the surging spread of the highly contagious Delta variant of COVID-19.

“I live in a community that would prefer me to defy the governor’s order and just do school the way I want to,” Caposey said.

But, Caposey said, “If we don’t listen, the insurance companies can say we’re not going to be protected. People don’t want to believe me or don’t think that’s a good enough reason.”

With a $19 million annual budget and minimal reserves, that’s a gamble Caposey isn’t willing to take. He’s especially reluctant, he said, because those costs could end up falling back on the very taxpayers who encouraged him to break from the state mandate.

“We either have to take it away from educational services we provide kids or we have to raise taxes,” Caposey said.

Signs that say “Unmask Our Children” are more prevalent in the area than campaign signs during a presidential election, Caposey said. Parents are hounding him at the grocery store, pointing out that some nearby district boards are making masks optional, in some cases over the objections of their own superintendents. (Health and science experts, supported by a range of research studies, widely agree that mask-wearing is among the most effective protective measures against COVID-19 spread.)

Caposey, meanwhile, is frustrated that his district’s insurance provider is saying only that it could cut the district’s coverage if it ignores the governor’s order—not necessarily that it will. The district spends $130 per student each year on coverage for property, casualties, and workers’ compensation.

Some community members think he should take advantage of the ambiguity and call the company’s bluff.

After only four days of instruction, two percent of the district’s 1,600 students were already in quarantine last week because of COVID-19 exposure. If the district weren’t requiring masks, another 100 students who were exposed to someone who tested positive would have joined them, per guidance from the Centers for Disease Control and Prevention.

“ I can’t knowingly recommend that we break laws,” Caposey said. “Not only is that professional suicide, it’s ethically against what I believe in.”

School Mask Mandates at a Glance

District leaders are trying to figure out the nature of the risks they’re taking on

Local and national media coverage of schools’ decisions about how to operate during the pandemic tend to focus on politics. But there are high-stakes legal and financial dimensions as well.

District leaders in recent weeks have been frantically consulting providers on legal risks related to the pandemic, while taking into account that courts’ opinions on current legal concerns are difficult to predict.

In Missouri, for instance, the provider for 90 percent of the state’s K-12 schools is urging districts to pick guidance from one health agency—either the CDC, the state health department, or the local health department—and stick with it, rather than cherry-picking elements from each. For instance, the CDC currently recommends everyone in areas of high transmission wear a mask indoors, but some county health departments in the state are allowing districts to make their own decisions.

At least nine states this year have passed laws offering schools shields from liability for pandemic-related grievances, according to an analysis by the Education Commission of the States. In other places, districts ask parents to provide a liability waiver that absolves the school system of responsibility for any COVID-19 cases that appear among its students and staff.

In Oregon, the Parkrose school district won’t have insurance coverage for anything pandemic-related this year. If the school faces a lawsuit, it will be up to the high-poverty district to pay for it, likely by going into debt.

“We’re very conservative about how we make decisions because nobody knows what’s going to happen,” said Sharie Lewis, the district’s director of business services and operations. “The new variant’s out, and it’s not playing well in the sandbox.”

The Oregon School Boards Association has been inundated with calls in recent days from superintendents parsing the particulars of the state’s mask mandate for schools, said Jim Green, the organization’s executive director. They’re asking questions like: Would we still have coverage if an influx of students gets a religious exemption? What about if we mandate masks and students ignore the rules?

Association leaders warned school board members in a webinar earlier this month that breaking the law could make their district liable. School board members and superintendents could be personally liable as well.

The school board for the Vandalia district in Illinois recently voted 6-1 against mandating masks, despite the governor’s recent executive order requiring universal masking in schools.

Instead, the district has implemented tiered masking protocols, mandating them only in classrooms or schools where an outbreak arises or districtwide if substantial transmission occurs.

The new variant’s out, and it’s not playing well in the sandbox.

Pritzker has said “it is reasonable that someone might file a lawsuit” against a district that doesn’t follow the state order. The Vandalia district’s insurance provider hasn’t confirmed whether it will cover a lawsuit should one arise, said Jennifer Garrison, the district’s superintendent.

“What I’ve communicated is it is 100 percent on the local taxpayers if we would have a lawsuit,” Garrison said. “Whether that’s a million dollars or multimillion dollars, we would have to collect that through our levy.”

The risk is heightened, said Green from the Oregon School Boards Association, because the association hasn’t been able to find any insurance providers willing to cover illness-related claims for schools.

“If you’re paying out a bunch of money on communicable diseases, it’s not a business model for them that makes sense,” Green said. “In the past, the communicable-disease cases we were seeing were wrestlers getting a skin infection from wrestling on mats. Those, I don’t think insurance companies had any issues with.”

See Also

Custodian Tracy Harris cleans a chair in a classroom at Brubaker Elementary School in Des Moines, Iowa.
Custodian Tracy Harris cleans a chair in a classroom at Brubaker Elementary School in Des Moines, Iowa.
Charlie Neibergall/AP

The costs of forgoing insurance could be steep

Premiums have risen nationwide in recent years as a result of increasing concerns over the risks of cyberattacks and the upswing of insurance premiums globally.

Some school leaders believe parents have grown more litigious against school districts in the last decades, driving up legal expenses that could instead be directed toward the classroom.

So far during the pandemic, districts haven’t seen a litany of high-priced claims, related to COVID-19 or anything else. In fact, some places saw dramatically fewer claims than usual.

Many school buildings were closed or only partially open, diminishing the likelihood of a teacher getting injured or a school bus crashing. Social distancing and masking were more widespread before widespread mass vaccinations began, reducing the potential for claims related to COVID-19 infections.

Some observers worry, though, that this year could be different. The Delta variant is more contagious than earlier strains of COVID-19. Political debates around masking have become more heated, with typically empty school board meetings filling up with angry parents.

Several district leaders told Education Week that COVID-19 has riled up the community like nothing else they’ve encountered in their careers.

“It’s just taken on a life of its own, and everybody has an opinion of it. There’s not a win-win situation,” said Brasil from the Keyes Union district. “You are never going to please everyone.”

Brasil is also worrying about liability, as his district’s insurance provider let him know recently that it won’t cover claims related to COVID-19 this school year.

The company’s late-breaking decision is especially painful and disruptive for the district after years of premium hikes, he said.

He tries to explain to parents that his decision on issues like masks is his best attempt at serving the interests of the entire community. They often don’t listen—but there’s not much Brasil can comfortably do in response.

“We’re all flabbergasted,” he said, “but they have us over a barrel because you can’t not have insurance.”

A version of this article appeared in the September 01, 2021 edition of Education Week as Why Failing to Require Masks Could Cost Districts Millions Later


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