A Guide to Managing Risk

This page explains how risk management can help you in reducing or preventing losses.  It also outlines steps to be taken in filing a claim should a loss occur.

Introduction

All UW-La Crosse employees should strive to provide a working and learning environment that is protective of our personal and financial assets.  In order for this effort to be effective each of us must participate in the processes established to meet UW System and State of Wisconsin Risk Management policies.  Because of the size of this campus, we depend on personnel to keep Risk Management advised of hazards that develop, correcting situations where possible.  We depend on each of you to secure property and buildings.  In addition, you are encouraged to promptly report all actual or potential claims.

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What is Risk Management?

Risk management involves the preservation of human, physical and financial assets.  This is accomplished by identifying, evaluating, and controlling loss exposures faced by the University.  Risk Management's goal is to minimize the adverse effects of unpredictable events.  For example, it is not known if a fire will ever occur in your office, but if it does, the adverse effect of that fire will be reduced if proper risk management tools have been utilized.

There are four basic tools of risk management:

  1. Avoidance

  2. Retention

  3. Loss Prevention and Reduction

  4. Transfer (to another entity)

Avoidance:  Many times it is not possible to completely avoid risk, but the possibility should not be overlooked.  For example, at the height of a blizzard, Fleet Services should not release vehicles for travel until the weather begins to clear, thus avoiding the risk of auto accidents during severe weather.

Retention:  It may be determined that it is more practical to retain a risk even though other methods of handling the risk are available.  For example, the University retains the risk of loss to computer equipment caused by mechanical failure of hardware components.  When losses occur, the cost of repairs is absorbed by the affected organizations' budget, except for those situations when we can collect from a negligent third party.

Loss Prevention and Reduction:  When risk cannot be avoided, the effect of loss can often be minimized in terms of frequency and severity.  For example, Risk Management encourages the use of security devices on all computers to reduce the risk of theft.  For people who need to drive 12/15 passenger vans, we require that they take a special driver training class or have extensive previous experience in such vehicles, in the hope of avoiding accidents in these larger passenger vans.

Transfer (to another entity):  In some cases, risks can be transferred to others, usually by contract.  When outside organizations use University facilities for public events, we require that they provide evidence of insurance and name the University as an additional insured under their policy, thereby transferring the risk from the University to the user.  The purchase of insurance is also referred to as a risk transfer since the policy actually shifts the risk of loss contractually from the insured entity to the insurance company.

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Contracts

If your department is involved in any contractual agreements, either to provide or receive goods or services, please contact Risk Management so that we can review the contract with you to make sure there are no improper transfers of risk, in either direction.  Often, other private firms or government agencies will incorporate clauses in contracts that attempt to release them from all liability for their actions relating to the contract.  These are often referred to as "hold harmless or indemnification" clauses.  The Attorney General has ruled that no State employee has legal authority to release or "hold harmless" another party, or to sign any contract in which the University agrees to "indemnify" another party.  Our office can often negotiate alternative language or remove these clauses altogether.  Also, remember that only certain administrators at the University have authority to sign contracts or agreements on behalf of the Board of Regents.

Risk Management can assist you in reviewing and developing contractual agreements that will accomplish the greatest protection of University assets.  Please check with our office on the language of any contract or agreement under consideration.

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Property Protection

The University of Wisconsin System is self-funded for property protection under Wisconsin Statute, Section 20.865.  This provides all-risk replacement-cost protection for damage resulting from direct physical loss, with some exclusions.  This coverage applies to buildings, contents, capital equipment, supplies, and vehicles.  All losses are subject to a $500 deductible, with two exceptions:  there is a $1,000 deductible for theft when there is no sign of forced removal and there is a $0 deductible on vehicle glass breakage.

Each spring, the Risk Management Office solicits information from each department to update our coverage for supplies, fine arts, museum pieces, special libraries, fabricated equipment and other categories.  All values are updated and reported to UW System and State Risk Management to assure adequate coverage of all University-owned property.  It is only through your cooperation and assistance that we can accomplish this task.

There are certain types of information that need to be reported on an on-going basis:

Equipment Off-campus:  Our office must be notified whenever items leave campus if the individual value of one item or the combined value of the shipment exceeds $100,000.  This coverage applies at off-campus locations, as well as in-transit.  Prior to the departure date, the following information must be furnished to Risk Management:  date of departure and anticipated date of return, a complete description of the item(s) including serial number and/or UW inventory number, destination, method of travel, and value.

Art Exhibits:  If you plan to have an art exhibit, each artist or owner must submit a signed Art Loan Agreement (PDF); along with an itemized listing of the works to be exhibited, by name or description, and an individual value for each item.  Should a loss occur, losses will be evaluated on the basis of the criteria on the Art Loan Agreement form.

Equipment on Loan (Borrowed):  In order to assure property coverage for non-owned items that are on-loan or borrowed, the affected department should submit a Request for Coverage-borrowed Items form to Risk Management.  Equipment on loan may include items borrowed from other institutions and corporations, as well as privately owned items as long as they are being used on University business.  Items which are personally owned by employees are generally not covered, with limited exceptions.

Equipment provided to the University which is here solely for purchase evaluation is the legal responsibility of the vendor.  Coverage requests would be evaluated on a case by case basis, depending on the circumstances.

Property Claims:  When a property claim occurs, it is important that the department react promptly to handle the situation and notify our department.  If the loss involves theft or vandalism, the local law enforcement agency must be notified.  Losses in excess of $10,000 must be reported immediately to Risk Management at 608.785.8569 or arain.niza@uwlax.edu.  In order to file a claim, individuals should use a Property Loss Report (PDF) form.  We also need copies of repair estimates, replacement costs and/or clean-up costs, when applicable.  Claims must be filed with our office in a timely fashion - the State requires that claims be filed within 90 days, excluding claims in excess of $10,000.  (Exceptions can be made by State Risk Management where unusual circumstances necessitate a longer time frame.)

Reimbursement to the department is accomplished by transfer to departmental funds to reimburse for expenditures already made.  Use of the loss control account is controlled by the Budget, Planning and Control Office in consultation with Risk Management.  Recovery will be made from the State Self-funded Property Program, if coverage applies.  If the damage was the result of someone else's negligence, recovery will be pursued against that party.

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Automobile Coverage

Comprehensive physical damage, collision and liability coverage is provided on all University and State Fleet vehicles.  Comprehensive and collision coverages are subject to a $500 deductible, except auto glass, which has no deductible.  Auto glass must be replaced by the current contract vendor - call Risk Management for current information.  Claims procedures for auto accidents are explained in the Liability Protection While Driving On University Business section of this document.

State Vendor or Big 10 Vehicle Rentals:  When an employee needs to rent a vehicle, the vehicle should be rented from the current contract vendor through the State of Wisconsin or Big 10 contract.  These contracts provide for both property and liability coverage, included in the rate at no extra cost.  If a rate from another vendor seems lower, make sure it also includes these coverages.

Other Vehicle Rentals:  When an employee needs to rent a vehicle when none is available through Fleet Services, State Vendor or Big 10 contracts, i.e., trucks for special projects or a large van if none is available.  When these type of rentals are arranged, the Collision Damage Waiver must be purchased and reimbursed as an expense.  Liability coverage will be provided by the State Self-funded Liability Programs.  In all cases, an employee must purchase the property and liability coverages when renting in a foreign country.

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Liability Protection

Liability coverage provides protection against claims made as the result of negligent acts or alleged negligence.  Negligence can be defined as the failure to act as a reasonable person would have under the same or similar circumstances.  In order for a claim to exist, the negligence must have caused property damage or injury to a person. 

The State's liability protection is afforded under Wisconsin Statute 895.46 (1) and extends to all employees in the course and scope of their duties.  It also extends to agents or volunteers, including students completing required clinical experiences.

Claims:  When a department becomes aware of a potential claim, they should contact the Risk Management Office to report the situation.  Dependant upon the type of claim, Risk Management may conduct an investigation and proceed to handle the claim.  Please be aware that there are specific guidelines for the filing of claims against employees, officers and agents of the State, which are spelled out in Wisconsin Statute 893.82.  Claims will be defended by the Office of the Attorney General.

Please be aware that liability protection is not for injuries to UW personnel, but the injuries or damage to property of others, caused by the negligent acts of our employees and agents.

Liability Protection While Driving on University Business

Vehicle Use Agreement:  All persons driving University vehicles are required to sign a Driver Authorization Application (PDF), which indicates that the driver has read copies of the State of Wisconsin Fleet Policies and Procedures (PDF).  Liability protection is automatic for all employees driving State-owned vehicles on official business.  When driving their own vehicle on University business, the State liability protection applies on an excess basis only - the owner's personal coverage is primary.  The State liability and property program do not provide coverage for our employee or agent's vehicle.  Employees and agents should contact their personal insurance company to determine how coverage will be applied for business use of their vehicle.

All passengers in University vehicles must be on official University business.  Spouses, relatives, etc. are not authorized to ride with a University employee.

Van Driver Authorization:  The State of Wisconsin requires that all drivers of 12/15 passenger vans be specifically authorized to drive such vans.  Authorization is extended to those with prior van training or previous extensive experience in the same or similar size vehicles.  In all cases, employees cannot drive 12/15 passenger vans without being authorized.

Auto Claims:  All automobile accidents, irregardless of the extent of damages, should be reported to Protective Services within 24 hours or, in the case of injury, as soon as possible, at 608.789.9000.  In addition to reporting the accident to Protective Services, the local law enforcement agency should always be notified.  If an accident involves a fleet vehicle, report the incident to Fleet Services at 608.785.8586.  A packet of materials including instructions on what to do in case of an accident can be found in the glove box of all fleet vehicles, along with an incident report.  The form should be used by the driver to record the details of the accident while they are fresh in their mind.  The form should then be forwarded (or brought in person) to Fleet Services, located in the Maintenance and Stores Building.  The report will be reviewed for completeness and any questions the driver has can be answered at that time.  Risk Management and/or Fleet Services will investigate the accident and handle any damages to the property of others, injury to others or damages to University property (see Property Protection).

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Security

Physical security of University employees and property becomes increasingly important as the incidence of personal crime, theft and vandalism rises.  Our office encourages departments to be pro-active regarding security.

Officers from Protective Services are available to meet with you regarding security issues.  The Physical Plant Locksmith is another resource for information on restricted key systems and other types of access control.

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Other Programs Administered Through Risk Management

Camps and Clinics Special Medical Insurance:  A small amount of blanket medical expense insurance is available at a minimal daily/weekly cost.  This can be incorporated into various short-term or summer programs, i.e., music and sports camps.

Pilots Approved to Fly on University Business:  Because the severity risk is significant for an aircraft accident, the State requires that pilots flying on State/University business must be approved to fly in order to be eligible for travel expense reimbursement.  Contact Risk Management for a packet of information which includes application forms and details the pilot requirements.

Special Events Liability Insurance:  UW System has developed an agreement with a private insurance company to offer liability coverage, at a minimal premium, for liability protection for organizations that host activities that are not included in the University insurance program.  Risk Management will handle the arrangements, as well as premium collection.  Contact Risk Management for information related to Special Events Insurance.

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