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September 20, 1971
Washington State School Directors' Association
200 East Union Avenue
Olympia, Washington 98504
Attention: !ttMr. Michael G. Boivin
Assistant Executive Secretary
Cite as: AGLO 1971 No. 109 (not official)
By letter previously acknowledged you requested our opinion on several questions pertaining to the interpretation of § 1, chapter 269, Laws of 1971, 1st Ex. Sess., relating to school district liability insurance. For ease of reference we will set forth your questions, and our answers thereto, within the body of this opinion.
Section 1 of chapter 269, Laws of 1971, 1st Ex. Sess., the effective date of which is August 9, 1971, provides as follows:
"Notwithstanding any other provision of law, after the effective date of this 1971 act boards of directors of all school districts shall provide their employees with insurance protection covering those employees while engaged in the maintenance of order and discipline and the protection of school personnel and students and the property thereof when that is deemed necessary by such employees. Such insurance protection must include as a minimum, liability insurance covering injury to persons and property, and insurance protecting those employees from loss or damage of their personal property incurred while so engaged."
Your questions regarding this statute, together with our answers thereto, are as follows:
"What is the meaning of the words 'injury to persons' on line 17? In particular, do the words have a broad meaning such as 'any wrong or damage to another' or does it, within the context of the insurance industry, have a more specific meaning such as 'defamation of character, libel and slander'?"
[[Orig. Op. Page 2]]
In responding to this question we believe it would be helpful to explain, at the outset, the concept of liability insurance ‑ the first type or class of insurance referred to in the statute. This term is defined in Ballentine's Law Dictionary (3rd Ed.) as:
"A policy or contract of insurance whereby the insurer agrees to protect the insured against liability arising from an act or omission of the insured which causes injury to the person or the property of a third person, the liability of the insurer attaching upon the determination that the insured is liable for such act or omission, notwithstanding the insured has not sustained a loss in payment, voluntary or involuntary, made to the third person."
Since the legislature did not define the phrase "injury to persons" as used in the subject act, this phrase must be given its common and ordinary meaning. Accord, Miller v. City of Pasco, 50 Wn.2d 229, 310 P.2d 863 (1957), and cases cited therein. From this it follows, in our opinion, that the required liability insurance coverage for "injury to persons" must be sufficiently broad to include liability coverage for any actionable injury to the person of another which might be occasioned by the conduct of a school district employee while engaged in the maintenance of order and discipline and the protection of school personnel and students and the property thereof. We can see no basis for excluding any such potential actionable injury (meaning an injury for which an action for damages will lie) from the scope of the required insurance coverage.
"Are the words 'loss' and 'damage' as included on line 18 intended to mean all loss or damage? For example, is 'All Risk' coverage including such things as burglary, robbery, theft, kidnapping, use and occupancy, etc., required?"
The concluding clause of the subject statute calls for a district to provide insurance protection for its employees "from loss or damage of their personal property incurred while so engaged."
Thus, regardless of the manner in which the loss or damage to the personal property of a school district employee occurs, the statute contemplates that the school district will (when deemed necessary by its employees) provide insurance protecting those employees from any loss or damage to their personal property.
[[Orig. Op. Page 3]]
The only qualification is that the loss or damage, in order to be compensable, must be incurred while the employee is engaged in the maintenance of order and discipline and the protection of school personnel and the students and the property thereof.
"What is the meaning of 'personal property' in line 19?"
Again, as in the case of "injury to persons," the phrase "personal property" as used in the subject statute is not defined. However, according to 42 Am.Jur., Property, § 23, this term includes ". . . all objects and rights which are capable of ownership except freehold estates in land, and incorporeal hereditaments issuing thereout, or exercisable within the same. . . ." In other words, "personal property" includes all items of tangible as well as intangible property except certain interests in real estate. Within the context of the statute it would thus include such things as personal effects, documents, books, employee‑owned automobiles, etc.
"May the school district 'self insure' any of the required coverages?"
We find no express authority either in § 1, chapter 269, Laws of 1971, 1st Ex. Sess., supra, or in any other provision of law which would allow a school district to "self insure" any of the required coverages. Section 1 reads in terms of a school district's obligation to provide "insurance protection" for its employees. The term "insurance," as defined in our state insurance code (Title 48 RCW), clearly contemplates ". . . a contract whereby one undertakes to indemnify another or pay a specified amount upon determinable contingencies."
Other provisions of the insurance code ‑ particularly, chapter 48.18 RCW ‑ contain detailed requirements of both form and substance with respect to insurance contracts, and presumably the legislature, in enacting the present statute, was aware of these provisions. Graffell v. Honeysuckle, 30 Wn.2d 390, 191 P.2d 858 (1948). Nothing which is either expressed or implied in the act suggests that the legislature was thinking of any form of "insurance coverage" other than that of a formal insurance contract when it used this phrase. Thus, we conclude that the statute does not authorize a school district to "self insure" any of the required coverages.
[[Orig. Op. Page 4]]
"What limits would constitute reasonable 'minimum' liability insurance in lines 16 and 17?"
The reference in the subject statute to "a minimum" does not refer to the dollar amount of the insurance coverage; rather, it imposes a requirement concerning the minimum categories or types of insurance coverage which must be provided by a school district when it is deemed necessary by its employees under the circumstances contemplated by the statute. In other words, if the statute is invoked, the insurance coverage must, as a minimum, include liability insurance covering injury to persons and property together with insurance to indemnify school district employees for the loss or damage to their personal property.
However, in providing such insurance we recognize that a determination will have to be made by the district as to the "amount" of insurance to be obtained, for the legislature has not seen fit to prescribe any given amount in the statute. The question is, what amount will suffice?
Since the statute is silent in this respect (amount of insurance coverage), two possible constructions can be made. The first is that the school district will have to determine the potential extent of its exposure under those circumstances which may be reasonably anticipated and obtain insurance in a dollar amount sufficient to provide indemnity for those potential damage claims arising under such circumstances. The second possible construction is that the district, having obtained the types of insurance required in some minimal amount, might nevertheless then be construed to have complied with the statute.
This second approach, however, would give the statute an absurd construction, since the result could be a plan of insurance coverage which would be totally insufficient in amount to insure against the potential liabilities even reasonably to be anticipated. Such a construction, of course, is to be avoided under the rule stated in State v. Asotin County, 79 Wash. 634, 140 Pac. 914 (1914), as follows:
". . . An act of the legislature should not be given an interpretation which would make it an absurdity when it is susceptible of a reasonable interpretation which would carry out the manifest intent of the legislature. . . ."
[[Orig. Op. Page 5]]
Therefore, it is our opinion that the "amount" of insurance coverage to be obtained is an amount reasonably calculated to be sufficient to provide indemnity for such potential injury and damage claims as may arise by virtue of an employee of the district engaging in the maintenance of order and discipline and the protection of school personnel and students and the property thereof under those circumstances which may ordinarily be anticipated within the experience of the district. This does not mean that the amount of insurance must be of such magnitude to cover all possible or potential claims of a catastrophic nature. The key factor here is what would be considered reasonable to cover those potential losses as envisioned by an ordinary prudent person seeking to insure himself against such losses.1/
We trust that the foregoing will be of some assistance to you.
Very truly yours
FOR THE ATTORNEY GENERAL
Richard M. Montecucco
Assistant Attorney General
*** FOOTNOTES ***
1/We would certainly recommend a legislative amendment to this statute to clarify the exact dollar amount of insurance which should be procured by districts either on the basis of the class of the district or any other reasonable basis, and we would be glad to assist you in drafting the proposed amendment.