In the education sector, risk management is evolving into a more comprehensive approach across higher education and private K-12 schools. Rather than addressing risks in isolation, institutions are adopting an “enterprise” strategy, recognizing the interconnectedness of their risk profiles.
Deloitte’s insights reveal that infrastructure including governance, data processes, and culture is critical for educational institutions to navigate both threats and opportunities. Risks such as hazing, misconduct, cybercrime, athletic violations, and potential reputation damage due to racism allegations are on the radar of these institutions. Effective management of these risks offers a chance for schools to stand out in a competitive market.
John Lynch, an education industry consultant with Truest, notes that many schools are seeking external expertise for risk management solutions. McGriff Insurance Services, a Truist subsidiary, offers services such as cyber and privacy liability, crisis management, and educators’ legal liability insurance.
The pandemic presented financial challenges for private K-12 schools and higher education institutions, prompting cost-saving measures and adaptations like hybrid learning models. For colleges, pre-existing financial health influenced their ability to weather the pandemic, with many investing in online infrastructure and quarantine facilities.
Brad Clark, an insurance broker at McGriff, emphasizes the importance of a holistic view of risk management to protect institutional brand and reputation, which encompasses strategic, operational, financial, and traditional hazard risks.
With international student travel restrictions, institutions dependent on this demographic faced enrollment declines, prompting a search for domestic student growth to offset revenue losses.
Going forward, schools are advised to embrace enterprise risk management, focusing on strategic risks like leadership development and Title IX policies, operational risks including supply chain and regulatory compliance, financial risks through flexible capital structures, and traditional hazard risks managed by insurance.
Leadership changes pose additional strategic risks, with high turnover rates necessitating investment in finding the right leaders, a process that can significantly impact an institution’s strategic plan.
Educational institutions are now considering the impact of NCAA regulations on student-athletes’ rights to profit from their name, image, and likeness, and the associated risks to both the school and personal brands of the athletes.
Cybersecurity emerges as a critical concern, with schools increasingly targeted by cyberattacks, prompting the need for robust security systems and internal controls.
Clark and Lynch suggest that schools evaluate their current risk management practices and consider best practices moving forward, including consulting with the University Risk Management & Insurance Association and determining the appropriate scale for in-house risk management teams.
The article concludes by encouraging schools to engage with Truist relationship managers to further explore protection strategies, noting that insurance products and services are available through McGriff, subsidiaries of Truist Insurance Holdings. The content is clarified as not being a substitute for professional legal, tax, accounting, or investment advice.
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