367.1 Risk Management and Insurance

367.1 Risk Management and Insurance

A. Background

The university has a responsibility to protect and preserve its human, physical, and financial assets. This responsibility is exercised through a program of risk management and insurance. Risk management is a process of identifying, evaluating, and controlling exposures to loss, and the purchase of insurance is a method of transferring this exposure to a third party. It is not practical nor possible to purchase insurance coverage for all risks. When insurance is available for a risk, it is the function of risk management to evaluate the nature of the risk against premium cost. The university supports a program of loss prevention, loss reduction, and avoidance for all risks.

B. Policy

The office of administrative services is responsible for risk management and insurance for property and liability coverages (personal insurance coverage such as employee and student health and accident insurance, life insurance and L.T.D. are the responsibility of the human resources department). This responsibility includes recognizing and evaluating risks, purchasing insurance as appropriate, and processing claims. The responsibility is performed through coordination with the department of public safety for safety programs, crime prevention, and security; the human resources department for administration of the workers' compensation program; the facilities services department for environmental safety and programs relative to buildings and other fixed assets; and the athletic department for insurance on athletes.

C. Guidelines

1. Inquiries regarding property and liability insurance, new risks that may require insurance coverage, and the claims process should be referred to the director of administrative services.

2. The university's insurance coverage is reviewed and renewed annually. The anniversary date of most policies is June 1. Coverages are normally open for competitive bid every three years.

3. Departments should notify the director of administrative services and seek advice when considering plans for new or expanded facilities, leases, or other contracts, acquisitions, exhibitions, programs that are substantially new or altered and other matters that may affect property or liability insurance coverages.

4. Property losses and liability claims (including automobile claims) should be reported to the office of administrative services (ext. 3101). Accidents occurring on campus should be reported to the public safety department and accidents occurring off campus should also be reported to appropriate local law enforcement authorities. Any legal suit or threat of a suit for property or liability issues should be reported to the director of administrative services. The normal procedure for handling legal suits is to appoint one spokesperson for the university to develop information, answer questions, and communicate with insurance companies and attorneys.

5. Automobile coverage is for vehicles owned by the university, as well as vehicles not owned by the university but used for university business. Personal vehicles used for university business are subject first to the automobile owner's liability coverage; then university insurance will cover any excess over this primary coverage. The university has no coverage for physical damage caused by vehicles owned by others. If an employee is driving a rental car, university coverage will pick up after the rental agency's liability insurance is exhausted. The deductible for this coverage is the responsibility of the driver's department. Travelers should not buy additional insurance offered by car rental agencies while on university business. This insurance is not needed and the cost will not be reimbursed as a travel expense. More information about traveling and automobile insurance may be found in File 389.1 of the Policies and Procedures Manual.

6. Insurance held by the university covers only property owned by the university. Property that is on campus premises and owned by others is not covered by university insurance; it will normally be covered by homeowners insurance held by the individual owning the property. It is assumed that property that is owned by others and used for university business is adequately insured by the owners and there is no requirement for the university to insure it.

7. Listed below are insurance coverages currently in place at Furman. This is a list of coverages that are frequently asked about and is not a complete list of all coverages. Because of the complexity of various policies, these coverages can only be described briefly, and there is limited detail regarding exclusions and exceptions. If more information is needed, please call the Director of Administrative Services at ext. 2216. Because it is not a good practice to publicly divulge insurance limits, this information is not provided below.

a. Commercial Property. This blanket all-risk coverage includes real and personal property owned by the university or that the university is responsible for insuring. It includes boiler and machinery coverage, loss of business income, radioactive contamination, trees, on-campus exhibitions, and EDP equipment and media. Also included is coverage for earthquake, flood extra expense, valuable papers, watercraft, errors and omissions, and service interruption. The deductible is $5,000 per occurrence for most perils, but flood and earthquake is considerably higher.

b. Commercial General Liability. This policy provides comprehensive general liability coverage for faculty, staff, and students while acting as employees or volunteers. Specific exclusions include educators' professional liability, medical expense liability, and foreign liability; however, these risks are covered by other insurance policies.

c. Workers' Compensation. This coverage provides statutory benefits as required by the South Carolina workers' compensation law for medical benefits and lost wages resulting from work-related injuries.

d. Educators' Legal Liability Insurance. This coverage is primarily for wrongful acts and omissions by the faculty and includes trustees, directors, officers, administrators, professional staff, employees, student teachers, and volunteer workers while acting within the scope of their duties on behalf of Furman University. This means that, if any of the persons mentioned is made a party to any action, suit or proceeding by reason of acting within the scope of their duties on behalf of Furman University, their legal expenses will be paid to the extent covered by the policy.

e. Automobile Liability and Physical Damage. This policy provides automobile liability (bodily injury and property damage) for all autos owned, leased, hired, rented, or borrowed by the university. Coverage is excess of any coverage available to the owner for all automobiles not owned by the university. Physical damage insurance is not provided on vehicles used for university business and owned by employees and authorized volunteers. Coverage for physical damage (comprehensive and collision) is provided for all vehicles up to six (6) years old owned or leased by the university. Autos hired, rented, or borrowed are also covered. No physical damage coverage is provided on employee-owned vehicles being used on university business.

f. Crime. This insurance covers the university for fraudulent and dishonest acts by employees, volunteer workers, officers, trustees, and directors.

g. Medical Professional Liability. This coverage is primarily for medical professional services performed at the student health center and for clinical internships for students in the field of health and exercise science.

h. Media Liability. This policy insures the university for claims arising from publishing and broadcasting activities that may give rise to claims of libel, slander, product disparagement, invasion, infringement, and plagiarism.

i. Foreign Commercial General Liability. This provides legal liability coverage for faculty, staff, and students on overseas or foreign assignments.

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