Competing Claims: Liability insurance program for teachers becomes political football

March 02--MONTGOMERY -- So far, only one legal case has been settled through the $5 million teacher liability insurance program Alabama set up last year, state officials say.

But it's far too early to say just how much money the program -- one of the most hotly-debated items in Alabama's education budget -- really needs.

"Liability claims are very slow to mature," said Ben Spillers, risk manager for the Alabama Department of Finance. "It will be five to seven years before this mellows out."

Spillers' office is in charge of a new state program, set up last July, to provide teachers with insurance to cover them if they get sued for their actions on the job.

Republican lawmakers introduced the program in last year's budget bill as a benefit for teachers, who haven't historically had liability coverage paid for by the state.

"We're providing teachers with a benefit that would cost them $500 a year," Sen. Bryan Taylor, R-Prattville, said in budget hearings last week.

The move, however, had a backstory. For years, the Alabama Education Association -- the state's largest professional organization for teachers -- has been one of the state's main providers of liability insurance for teachers, who get the coverage as part of dues-paying membership in the organization.

Democrats, long allied with the AEA, cried foul. They accused Republicans of carving $5 million out of the state's school system to duplicate a service AEA was already providing -- thus giving teachers an incentive to leave the organization.

The liability insurance program is a tiny sliver of the state's $5.8 billion education budget, but it has become one of the hardest-fought pieces of turf in that budget.

Debate rolls on

"Parents shouldn't have to provide toilet paper or paper towels to schools, " said Sen. Roger Bedford, D-Russellville. "Schools should provide the basics."

Bedford tried to persuade fellow senators last week to dismantle the liability program and spend the money on bathroom tissue.

The current draft of the state's education budget, now before the Legislature, would give the teacher liability program $3 million in 2015, $2 million less than its 2014 cost. Bedford wants to take the entire $3 million and create an emergency toilet paper fund for school systems, which would have to be depleted before school systems could ask parents to provide similar supplies.

"It's real dollars that affect every school in the state," Bedford said. Senators rejected Bedford's plan.

Democrats have also questioned the need for the program now that teachers may be on their way to getting immunity from some civil suits. The House of Representatives on Thursday passed a bill that would grant teachers statutory immunity similar to that enjoyed by other state officials, which would protect them from lawsuits from actions done in their official capacity, unless those teachers act maliciously or exceed the bounds of their authority. The bill is on its way to Gov. Robert Bentley's desk.

Republicans say both the insurance program and the immunity bill are simply providing teachers with protections most other states already offer. Alabama is one of only five states without some form of statutory teacher immunity.

"When a teacher or a state employee properly carries out the work and duties that we ask of them, they deserve to do so without fear of lawsuits or adverse action taken against them," the bill's sponsor, Rep. Mike Jones, R-Andalusia, said in a press release.

'Less than a million'

So far, the biggest beneficiaries of the program may actually be school districts, who could see a little money shaved off their insurance bills.

Alabama teachers have long had at least one source of liability insurance other than AEA. Alabama Risk Management for Schools, a nonprofit set up by the Alabama Association of School Boards in the 1970s, insures school boards against lawsuits.

Until recently, that insurance system covered teachers and other support employees -- at the local school system's expense. ARMS administrator Dwight Hester said the system handled about 75 to 80 lawsuits in any given year. He said the cost of covering teachers varied from year to year, depending on the results of those suits.

"It was less than a million dollars per year," Hester said.

Since the state set up its own program, ARMS has dropped employee coverage from its own insurance. Hester said the move would save the average school district about 6 percent on its liability insurance, which still covers school board members and liability related to school property.

Calhoun County Schools superintendent Joe Dyar said he's not sure how much the new system saved county schools.

"I can tell you that we have not had many lawsuits, if any," he said.

Hester said he's not surprised that the state insurance system has only picked up one case so far. ARMS is still responsible for lawsuits that began before the state system was set up, and most suits spend years in court before any money is paid out.

"At this point, nobody probably has a statistically significant number of cases to discuss," he said.

Sharing claims

What effect the new insurance program has had on AEA's membership, if any, isn't clear. Attempts to reach AEA spokeswoman Amy Marlowe for comment on Thursday and Friday were unsuccessful.

Eric Mackey, director of School Superintendents of Alabama, said he didn't expect the new liability insurance to lure many teachers away from AEA. While ARMS defended teachers in suits from outside the school system, he said, it didn't represent them in legal disputes with the school system itself. Teachers turned to the AEA to represent them in those cases, Mackey said.

"Most of the disputes are actually between employees and boards," he said.

Hester said the new liability system would likely wind up in court or in negotiations with AEA soon, as lawyers try to work out who actually pays when teachers lose a lawsuit. That usually happens when someone has liability insurance from two sources, he said.

"The real story will be how they share those claims," he said.

Plaintiffs' lawyers will also be watching, Hester said. When more than one liability company is involved, he said, there's a potential to collect more money in a suit.

"The bigger the target," he said, "the larger the potential litigation is."

Capitol & statewide reporter Tim Lockette: 256-294-4193. On Twitter @TLockette_Star.

___

(c)2014 The Anniston Star (Anniston, Ala.)

Visit The Anniston Star (Anniston, Ala.) at www.annistonstar.com

Distributed by MCT Information Services