Welcome Property and Liability Insurance Coverage Overview 2011 Department of Central Services Risk Management Division (RM) 1

Introductory Remarks Today’s presentation will be available for you on the DCS Risk Management Website 4

Questions When the lines are opened, all participants will be able to hear your internal discussions; Please speak one at a time and state: o Your name o Your position o Your agency or higher education entity o Your question 5

Today’s Discussion Items Introductory Remarks Underwriting Surveys Premium Payments Purchase of Property and Liability Insurance Outside of RM Program To Avoid Problems and Reduce Costs MMSEA Liability Trends Liability (Self-insured) o Tort o Auto 2

Today’s Discussion Items Marsh Commercial Lines of Coverage Directors and Officers, Educators Legal Liability, Employment Practices Liability (Commercial Insurance with Self-insured Retention (SIR)) Insurance Policy Coverage Issues Employee Dishonesty (Commercial Insurance) Property Insurance Fine Arts Insurance Auto Physical Damage – Specialty/Passenger Vehicles Other lines: Aviation, Foreign Liability, Out of State 3

Underwriting Surveys Property Fine Arts and Valuable Papers & Records D&O / ELL Vehicles Out of State Travel Foreign Travel Employee Dishonesty 6

Premium Payments Budget for insurance costs Credit incentives offered if payment received within 45 days of invoice If it’s a budget issue, call RM 7

Purchase of Property and Liability Insurance Outside of the RM Program Call Risk Management Governmental Tort Claims Act (51 O.S. § 158 (C). “If a policy or contract of insurance... is applicable, the terms of the policy govern the rights and obligations of the state...” “Other Insurance” (You may have bought nothing but trouble.) 8

To Avoid Problems and Reduce Costs Need additional Property & Casualty coverage? Call RM before purchasing (74 O.S. § 85.58A) 9

Medicare Secondary Payer Mandatory Reporting Provisions Update Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 See 42 U.S.C. 1395y(b)(7) & (8) (MMSEA) 10

Major Coverage Areas State of Oklahoma Liability Trends 11

Tort Liability Trend 12

Vehicle Liability Trend 13

D&O, ELL, EPL Trend 14

ELL - Higher Education 15

D&O – State Agencies 16

Similar to Commercial General Liability and Business Auto Liability Insurance In the Private Sector Liability Discussion: Tort Liability and Auto Liability 17

Self-Insured Programs: Tort Liability including Auto Liability Governed by 51 O.S. § 151, et seq. the Governmental Tort Claims Act (GTCA) and RM Promulgated Rules, OAC 580:25-1-1, et seq. No policy of insurance applies/No deductibles apply 18

Strict Adherence to GTCA Limits: o Maximum of $25,000 Property Damage o Maximum of $175,000 each claimant (other than property) o Maximum of $1,000,000 all claimants arising out of single occurrence or accident Claimant has 1 year from date of loss to file a claim Claim shall be filed with RM Exclusive remedy for tortious conduct of State employees Specifies how recovery may be made Broad exemptions from liability 19

State Tort Sub-activity Fund Will Only Respond If claim filed in accordance with GTCA If the State or its employee is negligent If the State employee is within the Scope of Employment as defined by the GTCA State employees may be held personally responsible per GTCA If there are no GTCA exemptions 20

Public Officials Liability (D&O) Educators Legal Liability (ELL) Employment Practices Liability (EPL) Claims Outside of GTCA Protection (U.S. Constitutional and OK Constitutional) 21

D&O, ELL, EPL All lines insured Self-insured retention applies Essentially protects against U.S. Constitutional and Oklahoma Constitutional violations per exclusionary endorsement to all policies 22

Tort Claims With D&O or ELL Allegations Claim filed under GTCA o Claim alleges Tort issues covered by GTCA o Claim alleges U.S. Constitutional and Oklahoma Constitutional Issues or possibly other allegations outside of GTCA Possible coverage under both GTCA and D&O, ELL, EPL policies 23

Why should you care about the difference between GTCA and D&O, EPL & ELL? Before a claim can be paid out of the Tort fund, a tort claim must be filed pursuant to the terms of the GTCA. GTCA Claims vs. D&O, EPL & ELL Claims 24

Some claims allege both GTCA violations as well as constitutional violations Deductibles come into play: $0 for GTCA allegations; agency selected deductible for other allegations Why should you care about the difference between GTCA and D&O, EPL & ELL? 25

Sample of claim with mixed allegations: Claim properly made under the GTCA but also alleges a claim covered D&O or ELL--all claims (state and federal) settle for $1 million: Payment allocated as follows: o Risk Tort Fund (GTCA) $175,000 o Agency$150,000 (or agency selected deductible) o Risk D&O Fund$100,000 o D&O Insurance $575,000 o Total$1 million GTCA Claims vs. D&O, EPL & ELL Claims 26

To Avoid Problems and Maximize Recovery of Losses Coordinate all property and liability claims through RM. Report all claims to RM immediately o Do not delay reporting o Delays may inhibit your ability to recover losses 27

Insurance Policy Coverage Issues Do not attempt to interpret insurance coverage. Do not allow others to interpret coverage. Call RM 28

Communication Reporting Timeliness Our Ability To Protect Your Assets Depends Upon You 29

MARSH COMMERICIAL LINES OF COVERAGE 30 s