You Can’t Buy Enough Insurance For This !!

Like most everyone else in the country you can’t help but get wrapped up in the Penn State scandal. As a long time fan of Penn State Football , and a parent of 3 young children I am horrified, disappointed, and angry all in the same potent elixir. I have yet to speak to anyone who doesn’t share at least some point of view.


What strikes me most when viewing this situation from the prism of my own profession (risk management & insurance broker) are a few very interesting observations that jump out at me which I feel compelled to share.



1)   Sandusky would have passed most if not all of the State run, or vendor purchased background checks any responsible Non Profit or teaching institution would have conducted before entrusting their resources and most precious treasure their children.  He had no history of child abuse or being a sexual predator. My takeaway here is that background checks, while a critical safety net and an important tool are not the end all be all in protecting any business , institution or non profit from the perils of a poor hire or rogue employee. Your responsibility and the continuity of your organization goes far beyond an initial background check. Background checks are step A in the responsibility alphabet.


2)   You can’t buy enough insurance to cover the Board of Directors or the Non Profit itself  of Second Mile. The potential net income loss on their financial statements is enormous, further  the potential litigation each Board Member may encounter that may pierce the corporate veil and into their personal assets is a potential nightmare scenario. As of this writing according to the NY Times the Board just decided to begin the process of shutting it’s doors. The result of poor risk or any other form of basic management.



3)   When your work product is children, seniors, or the disenfranchised you must be vigilant every single day in watching, monitoring and training your staff. Having a systematic set of protocols, making sure your staff is aware of the red flags and how to respond to a query or red flag is critical. Failure to do so kills your “brand” and your work product  which is not covered by insurance. It’s not uncommon for a Nursery School to lose 80% of their clientele if abuse is asserted. There is NO insurance for that.


4)   There is no substitute for “Awareness & Communication”. We are strong proponents of properly educating both parents and children on what is appropriate and what is not. Keeping the lines of communication as open as possible between child, parent , and facility. A child’s safety is the mutual responsibility of everyone not just the facility. Share that responsibility thru education and communication with ALL stakeholders. If your systems fail, which invariably they can, creating a culture of “Awareness” and Communication” can stop a predator dead in their tracks preventing further damage. The survival of your organization and business will then depend on the actions or in actions taken after the knowledge an “event” had taken place.



5)   Have a very clear reporting policy consistent with your goals and values as an institution; share it with staff, and parents. Be open about it, scream it from the hills. If a predator sees that your facility is aggressive and vigilant about child safety they may pick an easier target. Set up the protocols in advance to take the emotion out of it. Make it a check list so no one has to think. We strongly advocate retaining the services of a specialist labor attorney who can help you craft a policy that strikes a balance between legal compliance , your goals and values. If you don’t know a good one, please let us recommend Jackson Lewis LP which specializes in this arena and has offices all over the country. Richard Landau is attorney we have had great results with for a number of our clients.


I can drone on here however I will spare you . There are so many rich discussion points when a tragedy like the Penn State Scandal occurs. I will post further  on this topic as I believe it so important. The perils and the strategies for being a best practices facility, non profit or business can really dictate both continuity of care for your constituents as well as helping attract future donors and board members. We hope to have in the future examples of best practice action plans,  steps to take, guest speakers and panelist that will add substantive value , assisting our clients, and readership in avoiding being a target of a Sandusky like predator.


There is no substitute for being proactive about creating a culture of awareness and communication in your organization. A child’s safety is our mutual responsibility  so let’s treat it that way to achieve the best possible outcome because you just can’t buy enough insurance if you fail!

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