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Insurance letter still a mystery

Alissa Widman Neese • Jul 7, 2013 at 9:27 AM

A letter from a former insurer is the latest topic of disagreement between consistently split board members at Huron Schools.


It has been confirmed the document is a fairly common reservation of rights letter — on that much, board members can agree.


The point of contention, however, is what the letter’s contents mean for the district’s future. One board member suggests the letter offers disastrous financial details, while another says it doesn’t provide any new information.


Huron Schools officials refuse to publicly release the letter, citing attorney-client privilege after the Register emailed several public records requests to district treasurer Mike Weis this past month.


A reservation of rights letter is “an insurer’s notification to an insured that coverage for a claim may not apply,” according to the Glossary of Insurance Management Terms from the International Risk Management Institute. 


“Such a notification allows an insurer to investigate (or even defend) a claim to determine if coverage applies (in whole or in part) without waiving its rights to later deny coverage based on information revealed by the investigation,” according to the glossary.


Ohio School Plan, the district’s former insurer, dropped Huron Schools on July 1. The change was likely prompted by three lawsuits filed against the district in the past year, all related to the board’s 3-2 decision to fire former superintendent Fred Fox this spring. Fox is appealing the decision.


Board members selected Liberty Mutual Insurance as the district’s new insurer at a public meeting June 27, increasing its annual insurance costs from $38,000 to $61,000. Liberty Mutual Insurance will cover all future legal issues for the district, but it’s unknown how much of the district’s past and current issues Ohio School Plan will continue to cover.


At their June meeting, board members tiptoed around the topics included in the withheld reservations of rights letter during a public discussion. After a heated debate, a 3-2 majority ultimately decided to not release it, however, heeding their attorney’s advice. 


Board member Tim Sowecke, who voted against releasing it, said the “impromptu motion” inappropriately disregarded the district’s legal advice. As he understands it, the reservation of rights letter simply identifies every legal action taken against the district, all of their possible outcomes and what portion of legal costs Ohio School Plan would cover, he said.


“Personally I have no problem releasing it, but our treasurer sought the advice of our legal counsel, who said it should remain confidential,” Sowecke said. “It doesn’t tell anything we haven’t already known.”


But board member Kevin Asher, who made the motion to release the letter, contends it outlines harmful developments to the district’s finances, specifically in scenarios in which the district is forced to rehire Fox.


“I find it hard to believe anyone has a good reason why the public shouldn’t see it,” Asher said. “But you can easily put one and one together and figure out why some people don’t want it out there.”


Board members are expected to select a new district superintendent when they meet 6:30 p.m. Monday. The only item on the meeting agenda is to enter a closed-door session to discuss employment of personnel, but a vote could follow. The meeting is at the Shawnee Elementary School conference center. 


Want to go?

What: Huron school board meeting

When: 6:30 p.m. Monday

Where: Shawnee Elementary School conference center, 712 Cleveland Road E.

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