Risk Management - Business & Financial Services

Risk Management & Insurance
March 25, 2015
Risk Management & Insurance
Discussion Topics
Section 1. Risk
Section 2. Risk Management
Section 3. Insurance
Section 4. Contracts
Section 1.1 Risk
What is Risk?
Risk is:
4 the potential for an act or
activity, or the failure to
act, to result in loss.
the element of uncertainty
present in all planning that
can impact the capacity of
an organization to achieve
its goals.
Section 1.2 Risk
What are Some Risks UCSB Faces?
Lab safety
Deferred maintenance
Active shooter
Student travel
Bluff erosion
NCAA compliance
Outreach involving minors
Information technology infrastructure
Contracts & Grants compliance
Faculty recruitment & retention
Section 1.3 Risk
UC Offices Deal w/Institutional Risks
OP General Counsel – Litigation management, legal advice
OP Risk Services – Insurance, litigation, claims, contracts
Risk Management Office – Insurance, litigation, claims, contracts
Contracts & Procurement Office – contracts, purchase orders
Business Officers – UC policies, internal controls, SAS 112 (auditing
Internal Audit – Annual Risk Assessment
Compliance & Ethics Committee - Compliance w/laws, policies
Student Affairs - Student Behavioral Health Team
Athletics – NCAA compliance
Environmental Health & Safety – Assess safety and hazards
Information Security- HIPAA, IS-3
Design and Construction – Seismic safety, construction code compliance
Office of Research - Compliance with grant regulations and laws
Section 2.1 Risk Management
What is Risk Management?
Risk management is a
The objective of the risk
management process is to
protect an organization’s
financial, physical, and
human assets from loss or
Section 2.2 Risk Management
The Risk Management Process
Section 2.3 Risk Management
Risk Analysis
Risk frequency and severity are the
two parameters that risk managers use
to determine how to appropriately
respond to risk.
High severity risks must be avoided if
possible or transferred if not. Thereafter extensively managed so as to
reduce the risk of catastrophic loss.
Low severity risks can be dealt with by
implementing loss control measures
and then retained as the cost of doing
Section 2.4 Risk Management
Different Ways to Handle Risk
Risk Avoidance - get rid of the risk if you can by not
engaging in the activity that causes it.
Loss Control - implement measures that reduce the
possibility that a loss will occur.
Risk Retention - assume financial responsibility for the
risk as a cost of doing business because it is small and does
not pose a significant risk to the organization
Risk Transfer – transfer the financial responsibility that
the risk represents to another party
Section 2.5 Risk Management
Risk Transfer
Risk Transfer:
– Insurance
– Indemnification
– Waiver of Liability
Section 2.6 Risk Management
UC Waiver of Liability
A Waiver of Liability –
Is a risk transfer tool
Protect the University from legal
liability for injuries sustained by
individuals participating in
voluntary activities.
Required for activities that create
physical risk to participants, e.g.
sports activities, off-campus travel,
field trips, boat charters, etc.
Section 2.7 Risk Management
All Employees are Risk Managers
When you drive a car in the course of business.
When your supervisor asks you to hire a caterer for a department event.
When you are implement a training program.
When you are responsible for a contract with a consultant.
When you must plan a field trip.
When you charter a boat for a
department event.
When you work in a lab.
When you work with power tools.
When you travel or arrange
someone else’s travel.
When you organize youth
outreach activities.
Section 3.1 Insurance
UC Self-Insurance Programs
The University of California has been self-insured since 1986. Selfinsurance is a form of retained risk. It established the following inhouse self-financed insurance programs:
Workers Compensation
Auto Liability
General Liability
Professional Liability
Employment Practices Liability
Hospital & Medical Professional Liability
Property Insurance
Section 3.2 Insurance
UC Commercial Insurance Policies
UC does not self-insure all its exposures.
It transfers the risk of some exposures by
purchasing commercial policies.
Boiler & Machinery
Builder’s Risk
Business Travel
Cyber Security
ICA & Club Sports
Fine Arts & Collections
Foreign General Liability
Foreign Workers’ Comp
Marine Open Cargo
Off-Campus Student
Sexual Misconduct
Threat & Security
Section 3.3 Insurance
Standard UC Insurance Requirements
GENERAL LIABILITY (contractual liability included) with minimum limits:
a) Each Occurrence
b) Products/Completed Operations Aggregate
c) Personal and Advertising Injury
d) General Aggregate
$ 1,000,000 CSL
As req’d by State law
$1,000,000 per occ.
ADDITIONAL INSURED: both the General Liability and Automobile Liability
policies shall be endorsed to include The Regents of the University of California as
additional insured.
Section 3.4 Insurance
The Certificate of Insurance
 A Certificate of
Insurance provides
evidence that an
individual or
organization carries
certain types and
limits of insurance.
 It is required by UC
contracts to prove
that campus
providers have met
contract insurance
Section 3.5 Insurance
Waiver of UC Insurance Requirements
 UC insurance requirements can be
waived if the exposure to liability is
 However when a Waiver is approved
there is no risk transfer which creates
increased liability for the University.
 Waivers are approved on the
condition that the department
requesting the waiver assume
financial responsibility for any losses
that arise out of the contract.
Section 3.6 Insurance
CampusConnexions Insurance
Insurance for Business Partners and Affiliated Organizations:
Contractor/Vendor Insurance Program
Registered Student Organizations Event Liability Policy
Foundations, Alumni, and Support Groups Policies
Tenant Users Liability Insurance Protection (TULIP)
Recognized Club Sports Camps and Clinics Event Liability Policy
Renters Insurance
Section 3.7 Insurance
Travel Accident Insurance
The University’s Travel Accident Insurance Program: for employees and students
who are traveling out-of-state on UC business or participating in UC-sponsored
activities. The benefits are provided at no cost and include:
Out-of-Country Medical Expenses
Emergency Medical Evacuation
Repatriation of Remains
Security Extraction
Travel Assistance
Personal Property and Lost Luggage
Trips Interruption and Cancellation
iJet/WorldcueTRAVELER: When University travelers register for travel accident
coverage they will receive travel alerts about the country they are traveling in. The
system also allows the University to keep track of and communicate with its employees
and students in the event of an emergency.
Section 4.1 Contracts
Contracts & Risk Management
A contract is a legally enforceable agreement between two (or more)
parties to perform specified act(s) in exchange for lawful consideration.
Section 4.2 Contracts
Types of Contracts
Facility Use Permits
Professional Services Agreements
Research Access Permits
Performance Agreements
Academic Agreements
Instructional Agreements
Purchase Orders
Leases, Rentals
Section 4.3 Contracts
The indemnification provision in a contract is a form of risk transfer. It
specifies who shall be financially responsible in the event of a loss.
The University uses the indemnity provision to require its business partners to
take responsibility for their own liability:
Consultant shall defend, indemnify and hold harmless University, its officers,
employees and agents from and against any and all liability, loss, expense
(including reasonable attorneys' fees), or claims for injury or damages arising
out of the performance of this Agreement but only in proportion to and to the
extent such liability, loss, expense, attorneys' fees or claims for injury or
damages are caused by or result from the negligent or intentional acts or
omissions of Consultant, its officers, employees or agents.
Regents’ Standing Order 100.4(dd)(9) prohibits campuses from entering into
agreements that require the University to take responsibility for the acts or
omissions of individuals who are not University employees.
Risk Management & Insurance
Mari Tyrrell-Simpson, Acting Risk Manager
Tel. 893‐4169; Email: mari.tyrrell-simpson@workcomp.ucsb.edu
Lee Mudrick, Risk Management Administrator
– Tel. 893‐2860; Email: lee.mudrick@ehs.ucsb.edu
Ron Betancourt, Risk Management Analyst
– Tel. 893‐5837; Email: ron.betancourt@ehs.ucsb.edu
Kimberly Tapia, Contracts Manager
– Tel. 893-5836; Email: kimberly.tapia@contracts.ucsb.edu
Daniel Sweeney, Contracts Analyst
– Tel. 893-2271; Email: daniel.sweeney@contracts.ucsb.edu
Risk Management & Insurance