Charter School Commercial Insurance Case Study

Get to Know the Client

In mid-2023, MB Davis Group took on a new client—a charter school in southeast Texas serving approximately eight hundred students. The school focused on providing a high-quality education to students who came from challenging, difficult circumstances.

Battling High Premiums and Inadequate Coverage

Before MB Davis took them on as a client, this charter school was experiencing two critical insurance-related problems:

• One, the school campus was located close to the water and within a hurricane-exposed area.
• Two, the existing schedule of insurance operated on the assumption the school’s buildings were made of vulnerable frame construction. (In Three Little Pig terms, the insurance companies thought the buildings were made of sticks.)

Because of these two factors, the school was paying excessively high premiums on their property insurance, and it was difficult for them to secure as much insurance as they needed.

Afraid of one catastrophic, costly weather event, insurance companies acknowledged the school had $60 million in property value but were only willing to offer around $15 million in coverage. This gap left the client financially vulnerable.

Using Data to Secure More Comprehensive, Affordable Commercial Insurance

This was the challenging landscape MB Davis Group had to navigate when taking over the client in 2023.

As is the first step with many of their clients, this commercial insurance consulting firm performed an in-person visit to the client. Knowing nothing can replace the insight gained from these boots-on-the-ground visits, they walked through the actual buildings throughout the school campus. Immediately one thing became evident. The construction was much better and the structures were more solid, reliable, and resilient than the data being sent to the insurance company suggested.

To continue the Three Little Pigs metaphor, it was clear the charter school had houses made of bricks, not sticks.

To rectify this issue, MB Davis Group engaged on a project that took two to three months. The client’s head of facilities and a loss control engineer chief from the insurance broker got together and crawled through every inch of every building. They scrapped the old insurance schedule and meticulously gathered new data to create a more accurate, realistic, reasonable insurance schedule.

When they were done, this new schedule reflected several key pieces:

• The existing buildings were not assigned enough value. The old schedule asserted they were worth $60 million, when in actuality the figure was closer to $75 million.
• The quality of the construction was adjusted. Instead of $60 million in “stick houses,” the new schedule was closer to reality: roughly $20 million in stick houses and $55 million in brick houses.
• Accurate, up-to-date data was gathered on relevant improvements. This included upgrades to the roofing, electrical work, plumbing, and HVAC systems.

When this project came to a close, the charter school had basic data that was much more credible, complete, and comprehensive. Insurance companies had a more accurate sense of the school’s structures and risks, and because of that, they could work more favorably with that charter school.

Diligence in the Commercial Insurance Plan Bridged Coverage Gaps and Plummeted Premiums

“The plan we implemented for this client sounds basic,” said Mitch Davis, MB Davis Group founder and lead commercial insurance and risk management consultant. “And, in some ways, it was, but it still required attention, management, and consciousness.”

That “basic” fix ended up saving the client hundreds of thousands of dollars every year in insurance premiums.

Beyond that, when the time came for the policy to renew, the school had three insurance package options instead of the single one they were working with before.

The final result was that the client ended up:

• Paying considerably less in insurance premiums than the year before.
• Receiving more comprehensive insurance than the year before.
• Having a better, more accurate sense of their existing insurance-related landscape moving forward (structure quality, asset valuation, liabilities, improvements).

Ultimately, this extra money allowed the charter school to better reach its mission and goals. Freeing that money from insurance premiums allowed the school to allocate more funds to scholarships for deserving families.

Could You Lower Your Insurance Premiums? Enjoy More Comprehensive Coverage? Both?

Are you struggling with exorbitantly high commercial insurance premiums? Are you having difficulty securing adequate insurance coverage for your business? Are you unsure where to turn to get real answers from real commercial insurance experts?

Set up your no-cost commercial insurance consultation today with MB Davis Group. Unlike other companies that give you the runaround with chat bots, you can book a time with MB Davis and talk to real qualified commercial insurance consultants.

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