Natasha Romagnoli and Anna K. Milunas
When more than just university dollars are at stake, understanding and maximizing control over the claims resolution process in advance is essential for higher education policyholders.
Diversity, equity, and inclusion (“DEI”) have always been controversial topics at colleges and universities, but the last several years have seen DEI debates amplified to the greatest degree as more educational institutions take open and affirmative steps toward addressing discrimination and intolerance on campus.
At a time when issues of racial injustice and implicit bias are so much in the forefront of the national conscious, even nascent allegations of student or employee discrimination (or reverse discrimination) can subject institutions to instantaneous and major public relations (“PR”) crises that come at a great cost to a university’s reputation, which is paramount to its continued success.
Negative PR, however, is not the only thing schools must contend with in this new environment. Claims that universities and colleges have violated federal or state anti-discrimination laws, or failed to adhere to their own anti-discrimination or DEI policies, are now more than ever resulting in formal lawsuits, in addition to complaints filed with state anti-discrimination commissions and other similar oversight bodies.
Consider Smith College, for example, where a former employee plans to sue the school—in addition to filing a claim with the Massachusetts Commission Against Discrimination, for creating a “racially hostile workplace” after Smith mandated anti-bias training for its white employees in the aftermath of an alleged July 2018 racial profiling complaint by a student. Or a community college in San Diego, where five current and former Black employees are suing for a “palpable climate of anti-Blackness at Southwestern College.” DePaul University was sued twice in six months by Black professors for alleged discrimination in the form of “irregularities,” “increased scrutiny,” and “microaggressions” in the tenure track evaluation process that violated DePaul’s anti-discrimination policies. A former employee of Cal State University, Northridge also filed a lawsuit against the university for discrimination, harassment, retaliation, and failure to accommodate a disability. Further, in May 2020, U.S. District Court Judge Indira Talwani permitted a breach of contract and section 1981 claim by a former student disciplined by Harvard University for sexual assault to move forward against the university on grounds that the university racially discriminated against the student in its handling of a Title IX complaint.
These claims come at a significant cost to educational institutions—not only in terms of immediate crisis management response and defense costs—but in settlements, which are often expensive, multifaceted, and even at times, unconventional. The University of Iowa, for example, reportedly agreed to pay a former field hockey coach and her partner a total of $6.5 million to settle two discrimination lawsuits. New York University recently reached a settlement that reportedly involved an agreement to effectuate new anti-discrimination policies and training, in addition to maintaining records of discrimination complaints and the university’s response to them.
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1. Assess the policies you have and reassess the policies you should buy in the future.
California courts strictly enforce an insurer’s duty to immediately commence defending its insured. The insurer’s delay in doing so, even if the delay is short, constitutes a breach of this important duty. In fact, California imposes a 40-day time limit for an insurer to provide its written coverage position under the Prompt, Fair and Equitable Settlement of Claims requirements stated in Title 10 of the California Code of Regulations at Section 2695.7.
Last week, the Seventh Circuit had occasion to consider the scope of a contractual liability exclusion in the context of professional liability coverage. In Crum & Forster Specialty Ins. Co. v. DVO, Inc., No. 18-2571, 2019 WL 4594229 (7th Cir. Sept. 23, 2019), an insurer insisted that its contractual liability exclusion did not render the professional liability coverage it sold illusory. The Court disagreed, however, holding that the exclusion was overbroad and would, if applied, defeat the fundamental purpose of the insurance. The Court further concluded that the policy must be reformed to meet the policyholder’s “reasonable expectations” of coverage.
The strategic importance and economic value of intellectual property (“IP”) can hardly be overstated in today’s global marketplace. Recognizing this, companies devote considerable time and resources to protect their vital IP assets and minimize the financial harm if/when problems arise. Evaluating the risks, understanding the insurance options available, and purchasing meaningful coverage that aligns with the needs of the business are critical pieces of the risk-management puzzle. Navigating the various options can be difficult. This article outlines some of the major issues.
Businesses are increasingly purchasing dedicated cyber insurance policies to address their cyber and data security exposures. To date, however, many of the judicial decisions addressing insurance for cyber exposures have done so under other, more traditional, types of insurance policies such as commercial general liability (“CGL”) and commercial property policies. Some of these rulings have disappointed policyholders by concluding that such non-cyber insurance policies do not cover cyber exposures. But a recent decision by the United States Court of Appeals for the Fifth Circuit demonstrates that certain non-cyber policies potentially afford coverage for cyber exposures. In Spec’s Family Partners, Ltd. v Hanover Insurance Co., No. 17-20263, 2018 U.S. App. LEXIS 17246 (5th Cir. June 25, 2018), the court of appeals found that a contractual liability exclusion in a management liability policy did not excuse the insurer of its duty to defend its policyholder, a private company, against a claim arising out of a payment card data breach. 
An issue frequently raised in coverage disputes involving claims-made liability insurance policies is determining whether certain pre-lawsuit events or disputes constitute a “claim” sufficient to trigger coverage.
The last several weeks have brought seemingly unending news detailing allegations of sexual impropriety against politicians, celebrities, the news media, and other public figures. As a wave of victims march forward and social movements such as the