Risk Management & Insurance March 22, 2016

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: 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 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 UC 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 stds.) 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 process. The objective of the risk management process is to protect an organization’s financial, physical, and human assets from loss or destruction.

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. There- after 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 business.

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 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. Self-insurance is a form of retained risk. It established the following in-house 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. Aviation 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 Travel

Section 3.3 Insurance Standard UC Insurance Requirements GENERAL LIABILITY (contractual liability included) with minimum limits:  a) Each Occurrence $1,000,000 b) Products/Completed Operations Aggregate $2,000,000 c) Personal and Advertising Injury $1,000,000 d) General Aggregate $2,000,000 BUSINESS AUTOMOBILE LIABILITY $ 1,000,000 CSL WORKERS COMPENSATION As req’d by State law PROFESSIONAL LIABILITY INSURANCE $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 requirements.

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 http://ucsb.marshcampusconnexions.com

Section 3.5 Insurance Waiver of UC Insurance Requirements UC insurance requirements can be waived if the exposure to liability is negligible. 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 3.7 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 Grants Research Access Permits Performance Agreements Academic Agreements Instructional Agreements Purchase Orders Leases, Rentals

Section 4.3 Contracts Indemnification 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: 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 Contacts Mari Tyrrell-Simpson, 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 Calli Price, Procurement Services Manager Tel. 893-3723; Email: calli.price@bfs.ucsb.edu Kimberly Tapia, Sr. Contracts Analyst Tel. 893-5836; Email: kimberly.tapia@bfs.ucsb.edu Daniel Sweeney, Sr. Contracts Analyst Tel. 893-2271; Email: daniel.sweeney@bfs.ucsb.edu

Risk Management & Insurance Questions?