Commercial Insurance Charter School Data Case Study

Given that, here’s how one charter school partnered with a commercial insurance consultant, using predictive modeling, data, and hard numbers to inform their insurance decisions moving forward.

Get to Know the Client

One of MB Davis Group’s clients is a charter school based out of southeast Texas. They serve approximately eight hundred students, and they signed on with the commercial insurance consulting firm in mid-2023.

Grappling with How Much Commercial Insurance Is Too Little (or Too Much)

This charter school has around ten different buildings, all of which are cumulatively worth about $75 million. (This is the approximate cost to rebuild those properties were they to be destroyed.)

These different properties, however, are not all located in the same place. They’re spread out across southeast Texas.

This leaves the client with a difficult question. How much fire insurance, for example, should be purchased? After all, one fire is unlikely to affect more than one building, especially if those buildings are spread out. Should the client account for $7 to $8 million in damages, assuming the complete loss of just a single building?

And then what about something like hurricanes? Hurricanes can absolutely destroy more than one building at a time. So, again, the client is left with a tough question. How much damage can one hurricane really do? How much damage should they account for, given their properties are spread out and aren’t likely to all be hit by the same hurricane?

Navigating Risk Management with a Comprehensive Data Report

To start to untangle these difficult questions, MB Davis Group pulled together a group of highly talented collaborators, experts, and actuaries to undertake a thorough analysis. The goal of this project was to figure out, using sophisticated data and modeling, how much damage a bad storm could actually do.

YThis data-driven analysis examined:

• The schedule of values associated with multiple client locations.
• The total insured values (TIV) of those properties.
• Numerous modeling results to determine damages from storms of different magnitudes (100-year storm, 250-year storm, 500-year storm, 1,000-year storm).
• A host of events that could damage the client’s properties (inland flood, winter storm, severe convective storm, storm surge, windstorm, earthquake)

By developing these various models and inputting the relevant data, the team was able to come up with reasonable estimates as to how much damage the client could expect based on storms of varying severity.

So, for example, a 1,000-year storm might be projected to do about $13 million in ground-up damage. But a 10,000-year storm might do more like $31 million in damage.

Earthquakes, on the other hand, weren’t projected to do essentially any ground-up damage until the 10,000-year event. Why? Because earthquakes aren’t prevalent in Texas.

Then there’s something like storm surge, which isn’t much of a consideration until the hurricane or windstorm is severe enough to create this secondary layer of ground-up damage.

After this comprehensive report was created, the client was presented with a full suite of insurance options that included different levels of coverage.

From there, the charter school was in a position to make informed decisions on how much insurance to buy. Because of the thoroughness of the report, they could take into account multiple factors:

• The cost of the insurance coverage.
• The likelihood of certain storm events.
• Their own financial risk tolerance (e.g., planning for the 10,000-year storm versus the 5,000-year storm).

Getting to the Best Commercial Insurance Program with Data-Driven Decision-Making

After analyzing multiple kinds of natural events that could damage or impact the properties, MB Davis Group used that information to propose different levels of commercial insurance solutions.

Having the data at hand allowed this client to make smarter, more informed fiduciary and business decisions. Rather than using their gut or past benchmarks, hard numbers backed up each potential insurance package and supported decision-making at every level.

One of the big benefits of working with a commercial insurance consulting firm is their connection to different industry-specific experts. Working with a great consulting team gains you access to those who can help you find and secure the best possible commercial insurance program for you and your business.

In this case, MB Davis Group pulled together a specialized team that led to the right:

• Schedule of values.
• Storm assessments.
• Insurance solution.

“We work with hundreds of professionals across the country,” said Mitch Davis, founder of MB Davis Group. “For this client, we were able to strategically select brokers and underwriters based on who had the tools and facilities to provide the kind of analysis that client needed.”

What Experts Are in Your Commercial Insurance Corner?

Putting together the ideal commercial insurance program for your business is rarely a simple, straightforward process. Working with a commercial insurance consultant gives you what you need to make the most informed, strategic decision possible:

• Expert industry advice.
• Access to critical resources and people that help you make your decisions.
• Insight into what’s best for your business now, as well as foresight about what to change or implement for the best results down the line.

If you have specific commercial insurance questions or concerns, book a no-cost call with MB Davis Group today.

Get thirty minutes of dedicated time to talk about your company’s insurance challenges, issues, and stumbling blocks. See what solutions half an hour with a commercial insurance expert can reveal.