School Committee doesn't understand insurance

I'm a little late with this one, as it occurred on July 18th, but the following video from the Salem School Committee meeting of that night makes me giggle. I would link to the agenda for the meeting, but for some reason it was never posted. In fact, the section of the city website for school committee info is woeful. Most recent meeting minutes posted are from April. Let the sun shine!

Anyway, watch this video, and we'll discuss what we learn.



You can watch the entire meeting here.

First, apparently a final location has been selected for Salem Community Charter School. Must have missed that. Interesting that the school will start the year in a store front before moving into office space. Not really an ideal thing to do in the middle of a school year.

Second, and funnier, or maybe sadder, apparently nobody on the school committee understands the difference between property insurance and casualty insurance. Considering the amount of money we give them to spend, this lack of understanding of basic risk management doesn't make me very comfortable.

Fleming asks why we would insure property we don't own. We aren't. The mayor says you would insure contents, not the physical structure. We aren't. Liability coverage doesn't cover either one. We are insuring ourselves against any liability claim that would arise from our negligence at that location. I've heard it said several times that we don't take good care of our public buildings. Let's say, for example, that whoever is responsible for cleaning the school goes to mop the floor, floods it with water, and walks away to do something. They don't put up any warning signs, and in the five minutes that they're doing something else, someone walks into the school, slips on the wet floor, and breaks their neck.

In this situation, the city is negligent, not the landlord, and would be on the hook for damages, probably into the millions in a case of paralysis. If it happened outside the school area, the landlord would be negligent, and should be covered as well.

A clause in a commercial lease requiring the tenant to maintain liability coverage on the premises is extremely common. I doubt there is a single property in Salem that the city rents that doesn't include such a clause. Ask some downtown store owners if they're required to carry liability coverage. You'll have a hard time finding many who aren't. You can read an example of such a clause here, under 8C.

The city can likely add this property as a covered location on it's existing liability policy, at little or no cost at all. That said, the city should also look into purchasing tenants insurance, which would cover theft or damage of any equipment at the location, as well as any improvements that the city makes to the location, in the event of a fire.

I'm not thrilled that they don't seem to be aware of any of this. I've wondered about our risk management strategy since the dock at the Blaney Street Pier was damaged a year and a half or so back, and the mayor didn't think that insurance covered damage from mother nature. The reason you practically can't get property insurance in Florida, and carriers are fleeing the state is the amount of money they've spent on paying hurricane claims. Mother nature's fury is the number one reason to buy insurance.

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One other note, from the twitter stream of city council at-large candidate Darek Barcikowski:

"This just in - all 10 candidates for at large who pulled papers have filed them and we will have a primary on 9/20 to narrow down to 8."

If you really want to get rid of an incumbent or two, your best hope is that they take it easy for the primary. Turnout will be absolutely anemic for it. If the anti-incumbent folks really mobilize, this is your chance to knock them off of the final ballot.

I'll be interested to see if enough of the school committee people turned in their papers to force a primary there as well. Based on the above video, I'm ready for some new blood there. Especially some that lives in Salem year round and can attend more than 66% of the meetings.