Risk Management & Insurance March 25, 2015

1. Risk Management & InsuranceMarch 25, 2015

2. Risk Management & Insurance Discussion Topics Section 1. Risk Section 2. Risk Management Section 3. Insurance Section 4. Contracts

3. Section 1.1 RiskWhat 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.

4. Section 1.2 RiskWhat 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

5. Section 1.3 RiskUC 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 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

6. 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.

7. Section 2.2 Risk Management The Risk Management Process

8. 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.

9. Section 2.4 Risk ManagementDifferent 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

10. Section 2.5 Risk Management Risk Transfer • Risk Transfer: • Insurance • Indemnification • Waiver of Liability

11. Section 2.6 Risk ManagementUC 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.

12. Section 2.7 Risk ManagementAll 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.

13. Section 3.1 InsuranceUC 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

14. Section 3.2 InsuranceUC 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

15. Section 3.3 InsuranceStandard 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.

16. Section 3.4 InsuranceThe 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.

17. Section 3.5 InsuranceWaiver 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.

18. 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 Campsand Clinics Event Liability Policy • Renters Insurance • http://ucsb.marshcampusconnexions.com

19. Section 3.7 InsuranceTravel 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.

20. 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.

21. 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

22. Section 4.3 ContractsIndemnification 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.

23. Risk Management & InsuranceContacts • 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

24. Risk Management & InsuranceQuestions?