Insurance agent cautions board: historic abuse claims and replacement costs are driving premiums; recommends reserves and safety focus

The district’s insurance agent of record, Bill Gilmore, told the board that two principal trends are pushing school insurance costs higher: rising replacement costs for buildings and a stream of large abuse/misconduct claims that often exceed statutory tort caps. Gilmore, introduced during the board’s budget presentation, laid out PACE risk‑pool numbers and recommended both preventive safety measures and a dedicated risk reserve.

"The two top things are property losses... and then the next biggest piece is the molestation issues continue to get worse," Gilmore said, explaining that those claims are typically in the millions and have a significant effect on pooled premiums and limits. He described recent changes in coverage limits and the added scrutiny carriers apply to historic misconduct exposures.

Gilmore suggested a risk‑management reserve in the $250,000–$500,000 range to enable the district to self‑insure smaller physical damage claims and reduce near‑term premium pressure. He also urged a renewed emphasis on employee safety to lower the district’s workers' compensation experience modifier, noting that injury experience affects rates for multiple years.

Board members asked about deductible options, equipment breakdown coverage, differences between appraisal and replacement costs, and whether premiums are subject to state or federal oversight. Gilmore said some aspects of cyber and AI risk are emerging federal issues and that the Oregon Department of Insurance reviews commercial rate increases.

The board subsequently approved the district’s property and casualty insurance for FY 2026–27 following the presentation.