These are fraught times for institutions of higher education in the U.S. as a shifting legal and regulatory landscape creates complex, disruptive, and viability-threatening risks. In the last year, elite research institutions, such as Harvard, Northwestern, Cornell, and Duke, were all hit with significant funding freezes when the False Claims Act was used as the basis for civil rights investigations. And, not just top-tier schools have been affected. Over 600 other schools have seen funding cuts, including community colleges. While much of the regulatory focus has been on antisemitism and diversity, equity, and inclusion (DEI) policies, state laws regarding tuition rates for undocumented and resident aliens have also come under intense federal scrutiny. Antitrust actions have also honed in on college financial aid policies and admission practices. Lastly, legal developments in disability law have reshaped how institutions accommodate students with physical and mental health needs.
How to navigate the storms
Institutions will need to successfully manage this increasingly risky environment by closely examining their insurance programs. The rise of third-party litigation, including suits brought by students, families, vendors, and advocacy groups, has significantly complicated defense strategies and driven up associated costs, making proactive coverage review more urgent than ever. This is why coverage of defense costs is absolutely essential. Institutions will need to enlist their insurance and legal partners to closely examine these specific coverages: Directors and officers (D&O) policies with educators' legal liability (ELL) endorsements; employment practices liability (EPL) and general liability policies (TPL); and ELL policies.
Final considerations
It is also worth noting that universal coverage is not available for expenses related to implementing injunctive relief, such as constructing a ramp. Associated defense costs, however