367.1 Risk Management and Insurance

Created by: Stephanie Ferguson on 02/28/2005
Category: 3 - Finance and Administration; 60 - Insurance/Legal
Originator: Associate VP of Facility and Campus Services
Current File: 367.1
Adoption Date: 09/25/2013
Reviewed for Currency: 09/25/2013
Replaces File: 367.1
Date of Origin: 02/15/1993
Classification: Faculty
In Archive? 0

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. 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 Director of Risk Management is responsible for risk management and insurance for property, automobile and liability coverages (personal insurance products available to eligible employees are coordinated in Human Resources). This responsibility includes recognizing and evaluating risks, purchasing insurance as appropriate, and processing claims. This responsibility is performed through coordination with departments across the campus.


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 Risk Management.  The university's insurance coverage is reviewed and renewed annually.

2. All contractors and vendors are required to provide evidence of insurance coverage prior to commencing work on behalf of the university.  Coverage must be maintained for the full term of the contract and any extensions.  Minimum coverage requirements are specified on the Facilities Services website. The University reserves the right to require higher limits and/or more specific coverages due to the nature of the event, project, venue or anticipated attendance.  Examples may include professional liability, sexual misconduct, or accidental injury coverage.

3. Departments should notify the Director of Risk Management 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, auto or liability insurance coverage.

4. Property and automobile losses and liability claims should be reported to the Director of Risk Management. Accidents occurring on campus should be reported to University Police and accidents occurring off campus should be reported to appropriate local law enforcement authorities. A follow-up report of all accidents should be forwarded to the Director of Risk Management.  Any legal suit or threat of a suit for property or liability issues should be reported to the Director of Risk Management so that the insurance carrier can be put on notice.

5. The university maintains automobile insurance for its fleet.  In the event of an accident, prompt notification should be made to the Director of Risk Management.  The university's insurance will cover the individual as well as the vehicle when the vehicle is owned or rented within the course and scope of employment.  Any deductible will be the responsibility of the driver's department.  Travelers should not purchase additional insurance offered by car rental agencies while on university business since the coverage is redundant.  However, maximum limits should be purchased when traveling internationally.  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 damaged caused by vehicles owned by others.  More information about traveling and automobile insurance may be found in File 389.1 of the Policies and Procedures Manual.

6. In most cases, university insurance covers only property owned by the university. Property that is on campus premises and owned by others is typically not covered by university insurance but will usually 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.  Exceptions might include fine arts brought to the campus for sponsored exhibitions. 

7.  Insurance coverages most often utilized at the university are highlighted below.  Additional coverage is also available for crime, fiduciary, network security, pollution, foreign liability, professional medical liability, and non-owned aircraft.  The Director of Risk Management should be contacted for policy details to include any deductibles, limits and exclusions.  

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, trees, on-campus exhibitions, equipment and media.

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 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 and includes faculty, 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. No physical damage coverage is provided on employee-owned vehicles being used for university business.