How Strategic Capital Planning Helps Schools Reduce Their Most Frequent Losses

• Sponsored by: The Hanover Group
• June 1, 2026

By Shanna Delph

The education landscape today faces mounting financial pressure as schools navigate declining enrollment and funding, increasing operating costs and years of deferred maintenance. At the same time, insurance markets continue to tighten as deductibles rise and underwriting scrutiny increases. As a result, capital investment decisions are more critical than ever, with direct implications for loss prevention and the schools’ overall risk profile.

For independent insurance agents advising education clients, these conditions create meaningful opportunities to help schools connect their capital planning efforts to risk management strategies. Agents can guide clients toward insurance programs that strengthen stability, safety and operational resilience.

Costliest Losses for Schools

With primary instructional buildings in U.S. public schools now averaging about 50 years old, aging infrastructure plays a significant role in school property risk. Water damage is the leading cause of damage—from both a frequency and severity standpoint. It is often caused by aging pipes, roof failures, heating, ventilation and air conditioning (HVAC) leaks, deferred maintenance and limited monitoring capabilities.

Additionally, fires continue to create significant challenges for schools. The most recent data from the National Fire Protection Association estimates that an average of 3,230 fires per year occur on K-12 school properties nationwide. Many stem from poorly maintained systems, including outdated electrical components, older kitchen equipment and deteriorating building infrastructure.

From a liability standpoint, slip-and-fall incidents remain the most frequent and severe source of claims. According to the National Institute for Occupational Safety and Health, slips, trips and falls are the most common source of injury among workers in elementary and secondary schools. Contributing factors include insufficient property maintenance, aging facilities and gaps in inspection protocols.

Though these losses are high frequency and severity, many are largely preventable with proper upkeep and proactive risk mitigation.

Why Capital Planning Is Central to Reducing Loss 

Against this backdrop, capital planning has evolved beyond a budgeting exercise into a critical element of risk management. As higher insurance deductibles shift more financial responsibility onto schools, capital investment decisions increasingly shape loss outcomes and risk profiles.

Deferred maintenance has created major backlogs in roof replacement, HVAC modernization, plumbing repairs and building updates, forcing schools to stretch limited funds across competing priorities. Without a risk-informed approach, investments may address short-term needs while leaving the most frequent and costly loss drivers unmitigated.

Effective capital planning prioritizes projects that reduce claim frequency and severity, such as addressing aging building systems and improving facility conditions.

At the same time, schools must consider that some modernization efforts can introduce new risk exposures. Technology investments can increase cyber risks and security requirements, while new construction can create temporary safety risks that must be actively managed.

Helping Clients Take a Proactive Approach 

Independent agents who understand the education sector are uniquely positioned to help schools influence risk outcomes through incorporating smarter capital investment strategies. The most successful agents go beyond coverage placement by guiding schools to insurance programs with built-in risk management support.

By partnering with carriers that specialize in this space, agents can offer solutions designed to reduce losses across both traditional infrastructure exposures and modernization risks. Here are three core investment areas agents can encourage schools to pursue:

1) Facility infrastructure. Water detection sensors help safeguard buildings by monitoring conditions around the clock, including during off-hours and school breaks, and are often supported through carrier-provided risk solutions. Asset lifecycle management (ALM) tools enable schools to track the condition of major systems and support more predictive repair and replacement planning.

Maintenance and asset management platforms further streamline inspections, routine work and long-term capital planning, helping schools allocate funds more strategically and reduce property loss.

2) On-site safety and liability. A layered approach to on-site safety blends advanced technology with consistent, day-to-day practices. Artificial intelligence (AI)-assisted security tools can help detect and respond to potential threats, while regular inspections and prompt repairs reduce everyday hazards. These efforts not only lower liability claims but also support stronger workers compensation outcomes by helping prevent common injuries.

3) Technology modernization. While new technology can increase cyber exposure, proactive planning helps schools stay ahead of emerging threats. As digital learning expands through cloud-based platforms and connected devices, schools can access cybersecurity resources through specialized insurance programs, including vulnerability assessments and multifactor authentication (MFA) that help protect data and reduce disruption.

Long-Term Value of Strategic Capital Spending 

Schools that integrate capital planning into their broader risk management approach see measurable rewards, including fewer losses, stronger protection for staff and students and improved insurance outcomes. Over time, proactive investments can reduce the total cost of risk, strengthen operations and support more dependable learning environments.

For agents, positioning capital planning as a risk management strategy, not just a financial one, adds meaningful advisory value. And for schools, partnering with an insurer that deeply understands education risk can make all the difference. At The Hanover, specialized underwriting, risk engineering expertise and loss-prevention resources are designed to help educational institutions protect their employees, property and long-term financial stability.

Through smart capital planning and the right insurance partnership, schools can move beyond reacting to losses and toward building safer, more sustainable futures.

Shanna Delph is chief underwriting officer, middle market, at The Hanover.

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