Legal Defense Reimbursement Program
Enhancements for ACSI's Legal Defense Reimbursement Program
ACSI has consistently looked for opportunities to assist member schools with practical, affordable services. As a result of seeing member schools face various legal actions involving employees or students, ACSI developed the Legal Defense Reimbursement Program. The program is not an insurance policy and does not provide any casualty payments for a lawsuit. However, it is designed to provide reimbursement to member schools of attorneys' fees and litigation costs the school must pay due to certain types of employee or student legal claims or lawsuits.
To illustrate, let's assume that a member school has terminated a teacher during the middle of the year. The teacher now claims that the school discriminated against her and breached her teaching contract. The teacher files a charge of discrimination with the EEOC or with a state civil rights agency. Unless the school has specialized "employment practices" insurance coverage or some other type of insurance coverage applying to employment decisions, the school will have to pay an attorney to represent the school. In addition, assume that the teacher files suit alleging a breach of contract. Most insurance policies do not provide coverage for contract actions. The school would have to retain counsel. The attorney fees in both cases could cost the school tens of thousands of dollars.
To further illustrate, assume that a member school expels a student during the school year or does not allow the student to graduate. Typical liability insurance would provide coverage and an attorney if the lawsuit alleged that the school was negligent. However, most general liability policies do not provide coverage or an attorney for a lawsuit that alleges the school breached an enrollment contract or discriminated against a student. The school again would have to retain counsel and pay the attendant costs and fees.
The ACSI Legal Defense Reimbursement Program (LDRP) reimburses the participating member school at a set hourly rate for the attorney fees incurred due to the above types of lawsuits or charge of discrimination. The best thing about the program is that it costs the school only $300 per school year to participate. The LDRP agreement entered into by the school and ACSI will reimburse a participating member school up to a total of $35,000 for attorneys' fees and costs for all covered suits or claims filed during the school year. The agreement is for one year and can be renewed each year. ACSI has expanded the program to include reimbursement of attorney fees of up to $750 for a participating member school to obtain legal advice for pre-litigation attorney consultations for threatened employment-related litigation. The exact, per-hour limit and other terms and conditions are contained in the LDRP Indemnity Agreement.
The LDRP program covers such suits or claims as:
- Student evaluation, discipline or graduation practices
- Suspension or dismissal of a student
- Failure of the school to meet standards of student educational preparation
- Discriminatory conduct toward students
- Employee references; breach of employee contracts
- Employee EEOC or state agency charges of discrimination
There are some lawsuits or claims that are not covered under the program. These suits include those where there is a physical injury to an employee or student, workers' compensation action or proceeding, or a sexual act directed against a student or employee.
The school must follow the procedures outlined in the Indemnity Agreement in order to qualify for reimbursement. However, these are simple and easy to understand and follow.
Questions about participation in the LDRP can be addressed to the ACSI Colorado Springs office at 719.528.6906, ext. 201. A member school should contact ACSI immediately if it has a covered lawsuit or employee claim.
Article by Attorney John L. Cooley "Enhancements for ACSI's Legal Defense Reimbursement Program."