Risk Management 101

1. Risk Management 101 An Introductory Guide to Risk Management and Managing Risks

2. Definition of Risk danger possibility peril chance exposure jeopardy consequence hazard menace threatgamble We are concerned with the potential loss, including economic loss, human suffering, or that which may prevent the organization from being able to achieve its goals.

3. WHAT IS RISK MANAGEMENT? • A conscious effort of planning,organizing, directing, and controlling resources and activities. • To minimize the adverse effects of accidental loss at the LEAST POSSIBLE ACCEPTABLE COST.

4. Risk Management Decision Process Monitor results/ Modify methods Identify exposures Implement selected method Evaluate loss potential Select method

5. Types of Risk and Loss • General Liability • Workers’ Compensation • Property Loss – building & contents • Athletic Injury • Business Interruption • Institutional Reputation and Image Loss • Contractual Activities • Vehicle

6. Types of Risk and Loss continued • Financial Risk • Legal Liability • Environmental Health & Safety • Information Management • Intellectual Property • Student Activities • Auxiliary Enterprises

7. California State University Risk Management Authority CSURMA • Joint powers authority (JPA) formed under CA Gov’t Code section 6500 et seq.; ultimately allows CSURMA to provide insurance programs, self-insurance programs, and related services to the 23 campuses, Chancellor’s Office, and auxiliaries. • Separate legal entity from the CSU. • Subject to open meetings (Bagley-Keene Meeting Act).

8. Programs in the CSURMA • General Liability Program • Workers’ Compensation Program • Master Property Program • IDL/NDI/UI Program • Athletic Injury Medical Expense Program (AIME)

9. Programs in the CSURMA continued • Property – Inland Marine Program • AGPIP – Auxiliary Group Purchase Insurance Program – create market clout among the CSU Auxiliary Organizations to drive premium costs down through group purchase of insurance. • Student Health Insurance Program (CSUSHI) • Foreign Travel Liability Program

10. Campus Risk Exposures • On the Job Safety (internal & external) • EPL • Vehicle Accidents • Vendors (contracts & product) • Building Maintenance (repairs, IAQ, general maintenance, etc.) • Facilities Use (internal & external) • Reputation (internal & external)

11. Headlines: Eight killed in Utah State University Van Rollover By Paul Foy ASSOCIATED PRESS 10:09 p.m. September 26, 2005 TREMONTON, Utah – A Utah State University van returning to campus from a field trip blew a tire on Interstate 84 and rolled over, killing seven agriculture students and an instructor. Three other students were hospitalized. The van overturned Monday on the freeway near Tremonton, about 65 miles northwest of Salt Lake City. All 11 occupants were thrown from the van. The students were underclassmen, mostly freshmen. "Some have only been on campus a couple of weeks," university President Stan Albrecht said, calling the deaths an "incredible tragedy." No one in the 16-passenger van, driven by the instructor, was wearing a seatbelt, the Utah Highway Patrol said. Six men were pronounced dead at the scene. Two others died at hospitals. Two of the survivors were in critical condition at McKay-Dee Hospital in Ogden, hospital supervisor Robert Miller said. A third was taken to Ogden Regional Medical Center. .... The single-vehicle crash occurred at about 4:30 p.m. It appeared the left rear tire on the eastbound van had blown as it tried to pass another vehicle, said patrol Lt. Ed Michaud. The Dodge van rolled four times, coming to rest on its wheels about six feet from a 50-foot-deep ravine, troopers said. The van's roof was collapsed to the windows. Parts of the vehicle and personal belongings littered the area near the freeway. "It was a horrific, nasty accident," said Trooper Jason Jensen. "It was one of those things you don't want to drive up on." Albrecht said the students had been on a field trip to look at harvest equipment near Tremonton, west of the Logan campus. Utah State University has about 21,000 students. .....A similar rollover shocked the school in April 2001. Six members of the men's volleyball club were injured when their Dodge van flipped over near Laramie, Wyoming. The crash prompted a government safety warning for large-sized vans.

12. What we think…. The usual reality.. Field Trips

13. Obligations • Know where the students are going. • Prepare them for an emergency. • Know in advance if there are health issues that may have to be dealt with. • Review acceptable actions and unacceptable actions.

14. Student Travel • Approval = Acknowledged benefit • Prepare the students for the travel – risks, expectations, contacts • Waivers versus Informed Consents • Know who is where • Options for those with disabilities

15. The Accident • Have your contact information handy. • Report the accident to the campus (your supervisor or the Police) as soon as you can. • Do Not Admit Fault. • Do Not make promises.

16. The Claim • Their’s Victim’s Compensation & Government Claims • Your’s Victim’s Compensation & Government Claims • Our’s CSU Risk Management – Program Administrators

17. Government Claim Booklet • State of California Victim’s Compensation & Government Claims Program • Includes Instructions & Claim Form http://www.governmentclaims.ca.gov/

18. METHODS OF CONTROLLING RISK • Avoidance • Transfer of Risk • Retention of Risk • Reduce Risk through Loss Reduction Efforts • Finance Retained Risk • Define Meaningful Standards and Expectations

19. EVALUTE LOSS POTENTIAL • Evaluation Techniques • Frequency/Severity of Claims • Publications/Periodicals/Other Universities • Political/Litigation Climate • Anticipate

20. The Challenges We Face • Internal • “We’ve never had that kind of loss” • “What, change my procedure, I’ve always done it this way!” • “I’ve taught this class for 20 years without a problem!” • “All Risk Management has is: bad news with higher price tags!” • No communication!

21. The Challenges We All Face • External: • The Insurance Market • Your vendors • Your constituents • Unions • Auxiliary Organizations • Foundations • Athletic Corporations • Bookstores • Food Services • Health Centers

22. OTHER RISKS TO CAUSE YOU WORRY • Liability • General, a wide variety of exposures, including civil liability arising out of accidents resulting from the premises or operations of a public university • Employment- the trifecta of risk • Expensive to defend • Awarding of compensatory, special damages • Awarding of plaintiff’s attorney fees • Automobile • Public Officials’ Errors and Omissions

23. Risk Management’s Role • Manages insurance and claims • Looks for process improvement through feedback • Consults • Reviews • Forecasts • Play “what ifs” • Thinks worst case scenarios • Recommends

24. Let’s Team Up! RM&S Takes an Active Role: • G.O. • Observe • Inquire • Alert • Collaborate

25. Most Risks Do Have a Reward! Be prepared in order to enjoy.