Risk Management and Insurance
Policy number: 11.1
Policy section: Risk Management
Revised Date: January 2, 2019
Definitions of capitalized terms are set forth in Appendix A.
2. Policy Statement
It is University policy to minimize the risks inherent in its many and diverse academic and nonacademic programs. To this end, a formal strategic risk management program has been established and will be maintained within the Office of Risk Management (“ORM”) through the Vice President for Business and Finance, to mitigate exposures and losses that may give rise to incidents associated with life safety, reputation, financial, operations and asset risk. Southern Methodist University is committed to a strong and active strategic risk management program, which includes, but is not limited to, selecting appropriate Risk Retention and Transfer mechanisms including budgeting and claims management in accordance with the University’s acceptable risk, and providing comprehensive insurance coverage appropriate to the University’s exposures. In addition, this policy supports the use of industry best practices for conducting risk mitigation and monitoring programs to minimize hazards associated with conducting the University’s business.
The purpose of this policy is to authorize ORM, through the Vice President for Business and Finance, as the only authorized office to purchase property and casualty insurance, to include select specialty allied health policies, on behalf of the University and any of its programs. ORM will also consult with departments such as Student Affairs regarding student health insurance, conduct risk control programs in a manner consistent with best practices for life safety, reputation, financial, operational, and property asset risk mitigation, and will support departments in establishing risk control programs. This includes the assessment and selection of appropriate Broker of Record providers for property, casualty, intercollegiate athletics, and select allied health programs, and support for the Student Health broker selection. ORM responsibilities also include the procurement of insurance, management internal claims, through insurers. Internal functions associated with this policy include: risk management and insurance, environmental health and safety, and resilience and crisis management.
4. Legal Consultation
ORM shall work closely with the Office of Legal Affairs for litigated and potentially litigated matters.
5. Applicability, Reporting, and Training
- University departmental faculty, staff, volunteers and contractors shall also abide by this policy. This includes informing ORM of any insurance procurement needs and involving them in any discussion or procurement of such insurance, to include their authorization through the Vice President for Business and Finance.
- University departmental faculty, staff, contractors and volunteers shall also have the responsibility to report all incidents that may occur which may give rise to a claim, and cooperate with all investigations associated with such incidents or claims at the request of the ORM and/or other parties included in the investigation including but not limited to Office of Legal Affairs, Law Enforcement, Third Party Administrators and Insurers or others as appropriate.
- All departments, faculty, staff contractors and volunteers shall be required to complete training as needed to support programs and loss prevention, as well as provide institutional information as needed for insurance applications, surveys, and program development in a factual and accurate manner.
Questions about this policy should be directed to the Office of Risk Management.
Failure to comply with this policy on behalf of the University may result in the individual or the individual’s department being responsible for damages, and potential disciplinary action up to and including termination.
Appendix A: Definitions
“Risk” as used in risk management and insurance literature and practice means: (1) the possibility of loss, (2) the probability of loss, (3) a peril, (4) a hazard, (5) the property or person exposed to damage or loss, (6) potential losses, (7) variation in potential losses, (8) and uncertainty concerning loss.
“Risk Retention” refers to the deductible or self-insured portion of a claim that the insured is responsible for.
“Risk Transfer” refers to transferring the risk to a third party through a means to include the purchase of insurance, or through contractual risk transfer such as requiring the contractor to absorb their liability for their actions.
“Broker of Record” refers to an insurance broker who has a license to obtain quotes for various insurance products and to sell insurance to the insured at the insured’s direction. SMU requires a contract with each broker of record for those programs described in the Risk Management and Insurance Policy, and reviewed and approved by the Office of Risk Management.
Revised: January 2, 2019
Adopted: August 23, 1999