From declining enrollment to rising operating costs and complex liability exposures, schools and colleges are navigating an increasingly difficult environment.
A sector under financial and operational strain
The financial picture varies by segment, but the pressure shows up everywhere. According to the National Center for Education Statistics, undergraduate enrollment peaked at around 18.1 million students in 2010 and has been declining since, with 1.2 million undergraduates lost between 2019 and 2022 alone. That enrollment loss hits smaller private colleges hardest, as they typically lack large endowments or state funding to absorb the revenue gap. Closures are accelerating. Nearly 300 colleges and universities closed between 2008 and 2023, and the pace picked up sharply in 2024.
Cultural shifts are compounding the problem. A growing number of students are going to trade schools or skipping college entirely, driven by questions about return on investment. That forces institutions to work harder to differentiate themselves and make the case for higher education in a skeptical environment.
K-12 public schools face a different but related challenge. As governmental entities, they aren’t going to close their doors the way a private school might, but they depend heavily on tax revenue and approved budgets. When residents or employers leave a district, the funding base shrinks.
Budget pressure shows up in deferred maintenance decisions, too. When money is tight, schools put off the spending they’d rather not defer. Many smaller colleges and independent schools occupy older buildings that require ongoing investment in electrical systems, plumbing, boilers, roofs and walkways. The average age of public school facilities in the U.S. is approaching 50 years, which means the deferred maintenance backlog is only growing. As those projects are pushed back, the insurance implications become harder to ignore: aging infrastructure can increase both property and liability exposures while making losses more difficult to absorb when they occur.
One exposure that demands more than coverage
Education’s most serious liability exposures aren’t easily addressed by purchasing higher insurance limits alone. Sexual abuse and molestation remains one of the most significant risks facing educational institutions because of its profound human, financial and reputational consequences. Coverage matters, but prevention and culture matter even more.
The market for abuse and molestation coverage has tightened dramatically. A major driver is the spread of revival laws, state legislation that extends or reopens statutes of limitations specifically for sexual abuse claims, allowing survivors to bring suits for incidents that happened decades ago. New York and California have gotten the most attention, but the trend has spread widely. As of 2025, 30 states have enacted some form of revival window or expanded statues of limitations for civil child sexual abuse claims, according to Enough Abuse, a nonprofit that tracks child protection legislation.
Consequently, carriers can face claims that date back 20, 30 or even 40 years, with investigations complicated by the fact that most current staff weren’t there when the alleged incident occurred. In response, many carriers have raised prices, cut limits, shifted from occurrence to claims-made forms, pulled back from excess layers or exited the space entirely, making coverage more difficult and expensive for educational institutions to secure.
For schools, the answer is to build a culture that prevents incidents in the first place. That means more than checking compliance boxes. It includes robust hiring practices, recurring state and federal background checks (not just at the time of hire), clear intake procedures, ongoing training on boundaries and policies that everyone understands and follows.
Colleges also need to pay attention to the campus programs that bring minors on site. Summer camps and athletic programs are common revenue generators, but they extend the institution’s exposure to exactly the population that revival laws are designed to protect. The underwriting process for abuse and molestation coverage increasingly scrutinizes these programs specifically.
These evolving liability exposures reinforce why educational institutions need more than insurance capacity. Strong underwriting is increasingly tied to what an institution is doing before a claim ever occurs — how it hires, trains, maintains facilities and manages day-to-day risks that shape loss potential.
Why specialized risk management matters
Addressing those risks requires a consultative approach to risk control. The old model, an inspector showing up with a hard hat and a list of demands, doesn’t move the needle on culture. Schools need risk management support that helps them understand where exposures are developing and what they can do about them.
That means practical tools, not just policies. Online training platforms with separate tracks for principals, athletic directors, teachers and bus drivers. Onsite training that reflects the actual environment. An underwriting process that asks detailed questions about hiring, intake and background checks. The best questions do more than identify weaknesses; they help schools see where they can strengthen their practices. In that sense, the application process itself can become a risk management exercise.
Brokers and agents who specialize in education understand this. Their clients face complex exposures and potentially severe losses. What they need from the market is more than capacity alone. They need underwriters, loss control staff and claims professionals who understand how education risks behave and where problems tend to emerge.
That specialization can also make coverage design more cohesive. Educational institutions shouldn’t have to piece together coverage from five different carriers. A program that combines general liability, professional liability, auto liability and property coverage under one roof can reduce fragmentation and help brokers evaluate how the pieces of a client’s protection work together.
The benefits of that approach can be significant. For example, a group of colleges that had previously purchased insurance individually came together under a consolidated program. The participating institutions gained economies of scale, shared risk management resources and a tailored risk control program. The review uncovered and closed coverage gaps that had existed under the prior fragmented arrangement.
Emerging risks are adding another layer
Technology is already changing how education insurance gets done. AI is helping underwriters prioritize submissions and streamline the intake of claims through first notice of loss processes, and those capabilities will expand as the tools mature. Most institutions are also exploring how AI can help on the administrative side, making processes more efficient without replacing teachers or other staff.
Educational institutions are also beginning to grapple with emerging risks tied to cybersecurity, social media and student privacy. Those exposures are evolving quickly and will continue to challenge both schools and the insurance market as technology becomes more embedded in daily operations.
That makes the broader point even more important: education risk is becoming less about any single coverage line and more about how well institutions understand, manage and connect the exposures around them.
For schools and colleges, it’s no longer enough to secure insurance. They must also build a risk strategy that combines thoughtful underwriting, practical prevention, coordinated coverage and claims support that can keep pace with a changing environment.
This material has been prepared for general informational purposes only, is intended to apply generally rather than to any specific company and presumes appropriate discretion will be exercised regarding any particular situation.
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