About the Trust

Definition of Education Risk Management

"Any action or non-action that reduces the frequency or severity of unintended losses."

History

During 1985 and 1986, members of the Middle Cities Education Association (MCEA) began a series of discussions on the subject of school district commercial insurance coverage. This was due to the escalating "insurance crisis" that many member school districts experienced with their limited commercial insurance coverages and increased costs. In response to these concerns, the superintendents of MCEA appealed to the Business Managers' Task Force to find a viable, economic resolution to the problem. In early 1987, after months of discussions regarding coverages, financing, service providers and member commitment, a decision was made to create a risk retention pool under the State of Michigan's "pooling" statue.

On July 1, 1987 after the development of governing documents and bylaws, twenty (20) MCEA members signed documents for the inception of the Middle Cities Risk Management Trust (MCRMT). Under the program, the Trust provided member districts with broad comprehensive liability, property and auto liability coverage. The Trust's retention was set by both a per occurrence of $250,000 and an annual aggregate limit of $3,250,000 as the maximum financial obligation. Excess insurance was purchased above the Trust's per occurrence retention to provide overall limits of liability up to $11,000,000 and property limits established at $100,000,000. In addition to pooled coverages, boiler and machinery coverage was purchased on a "first dollar" basis by districts, with no pool retention, at varying deductibles.

While the provision of adequate insurance "protection" was the primary purpose of MCRMT, the ability to exercise control over claims administration and loss prevention was also of paramount importance. An outside third-party claims administrator, Gallagher Bassett Services, Inc., was selected to administer the claims under the Trust's retention and also provide initial loss prevention services. Marketing and placement of the excess insurance coverage was assigned to Arthur J. Gallagher & Co. in Chicago. In August of 1987, the first Risk Manager of MCRMT was hired and office facilities acquired.

Three years later, in 1990, new office facilities were leased in East Lansing and loss prevention services were brought in-house with the addition of a Manager of Risk Control. By June 1995, the Trust had grown to thirty (30) members and a full-time staff of five. Also, an office condominium in Okemos was purchased to meet the service and administrative operation needs.

What began as an initial response to the insurance crisis has--nine years later--become an organization providing comprehensive insurance coverage, cost effective financial protection, and nationally recognized resources for professional risk management.

MCRMT Risk Control...
Provides Risk Control services that protect the interests of the Pool and its members.

Pre-Loss interests
Post-Loss interests

Assists members in managing the cost of risk through their own risk control efforts.

Assist through consulting, visiting, training, coordinating, researching
Provide a programmatic blueprint for managing educational risks.

Risk Control Surveys - Surveys are on-site field visits by Trust staff that identify and analyze potential loss exposures. Alternative techniques for controlling the exposure are explored with the member. Trust staff recommends the best alternative and provides technical assistance in implementing the proposed technique.

In-service Workshops/Seminars - Training seminars help member personnel to think like a risk manager. Emphasis is placed on identifying potential loss exposure and utilizing common risk control techniques for controlling the loss exposure. In-service programs are customized to the needs of the member. Contact the Trust office for a list of the most current programs developed.

Incident/Claim Investigations - Frequent or severe incidents may require someone from outside the district to come and review conditions for preventing future incidents from happening.

Exposure Analysis - Trust staff will analyze proposed or current activities for the potential risk of loss involved in a member sponsored activity or operational function.

Policy and Procedure Review - Policies and procedures are a frequent source of potential liability. Our staff reviews policies and procedures pointing out potential loss exposures and often rising topics to have addressed by our member's legal counsel.

Document Review - The member may take on exposures through various programs and services that are usually arranged through contractual arrangements. Our office can review these documents to ensure that the member is addressing risk management concerns, (i.e. the transfer of risk, insurance requirements and indemnification clauses.)

MCRMT Home