Transportation shortage: three things school districts – and parents/guardians - need to know

Student transportation is a struggle for many schools this year due to a critical shortage of bus drivers. Some schools have responded by paying parents/guardians to drive students as an alternative to providing transport by the school or its contracted vendor. In some instances, districts are reimbursing parents/guardians without any formal agreement or contract. At CM Regent Insurance Company®, we understand the desire and need to get students back to school. However, here are three things school districts and their stakeholders need to know:

1) Paying parents to transport students sets up a pseudo-employment situation, which could create a liability exposure for the school district. School districts considering this approach should consult with an attorney to review documentation, contracts and hold-harmless language, and policy outline. School districts also should consult with their insurance carrier or agent.

2) If parents are receiving a stipend for transportation, we recommend they do not transport any children other than their own. In the event of an accident, there is potential for a lawsuit filed by a parent who has entrusted another parent to transport their child. The suit could claim the driving parent is an employee of the school. While it’s impossible to predict the outcome of such a lawsuit, it is possible the driving parent could be viewed as an independent contractor working for the school to transport students. Therefore, it’s possible the driving parent’s personal auto policy would deny coverage.

3) At CM Regent, we strongly encourage districts to provide contracts for each parent as they would with any bus/transportation company, including the usual insurance language/additional insured and proof of insurance. Parents/guardians who are considering driving for their districts should talk to their insurance providers to ensure they have proper protection in place.

In addition to these three important considerations, Sharon Orr, CM Regent’s manager, Risk Control, is available as a resource to provide more detail on parent-provided transportation, the associated risks and steps districts can take to protect themselves.

About CM Regent Insurance Company®

This affiliate company of Church Mutual Insurance Company, S.I., leverages Church Mutual’s insurance expertise to meet the unique needs of K-12 school districts, colleges and universities. Coverages include commercial property and liability insurance, workers’ compensation, school leaders’ legal liabilities, excess liability, privacy protection, owner-controlled insurance and a variety of employee benefit products for public schools in Pennsylvania and Wisconsin.

About Church Mutual

Church Mutual Insurance Company, S.I., founded in 1897, offers specialized insurance for religious organizations of all denominations, public and private K-12 schools, colleges and universities, senior living facilities, secular and non-secular camps and conference centers, and nonprofit and human services organizations throughout the United States. Church Mutual markets most lines of commercial property and liability insurance, including multi-peril, workers' compensation and commercial auto insurance. In addition to insurance, Church Mutual provides a spectrum of value-added solutions that benefit its customers. Church Mutual holds the following honors:

• A.M. Best Company "A" (excellent) rating

• Wisconsin 75 Top Private Company by Deloitte US, 2016, 2017, 2018, 2019, 2020 and 2021

• Wisconsin 75 Distinguished Performer: Innovation by Deloitte US 2019

• 2021 Gallup Culture Transformation Award recipient

• 2020 Women and Diversity Award recipient from the American Property Casualty Insurance Association

• Futuremakers Partner by Wisconsin Technical College System

• Celent Model Insurer for innovation and emerging technologies

• Award in Innovation for entrepreneurialism and innovation by National Association of Mutual Insurance Companies

• 2018-2019 Employer of the Year by Northcentral Technical College

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1Church Mutual is a stock insurer whose policyholders are members of the parent mutual holding company formed on 1/1/20. S.I. = a stock insurer.