I suspect, without looking, that they're probably insured through a state risk pool, whether for all of state government or just institutions of higher education, rather than by traditional private insurance and that statute, or maybe state risk manager rules or a combination of both statute and rules, define what is covered and what isn't. Michigan also has a governmental immunity law that protects against some tort liability. Here, however, the conduct may well rise to gross negligence or intentional behavior that wouldn't be covered by immunity or by the risk pool. The intersection of what they're on the hook for with him going rogue (nudes, which I'll assume nobody asked him to get) versus practice film and what they can just pin on him alone will be interesting and probably very fact-dependent.