Risk Management 101

An Introductory Guide to

Risk Management and Managing Risks

Definition of Risk

danger possibility perilchance exposure jeopardy consequence

hazard menace threat gamble

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.

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.

Risk Management Decision Process

Identifyexposures

Evaluate loss potential

Select method

Implement selected method

Monitor results/ Modify methods

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

Types of Risk and Loss continued

Financial Risk Legal Liability Environmental Health &

Safety Information Management Intellectual Property Student Activities Auxiliary Enterprises

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).

California State UniversityRisk Management Authority

Programs in the CSURMA

General Liability Program Workers’ Compensation

Program Master Property Program IDL/NDI/UI Program Athletic Injury Medical Expense

Program (AIME)

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

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)

Headlines: Eight killed in Utah State University Van Rollover By Paul FoyASSOCIATED 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.

Field Trips

What we think…. The usual reality..

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.

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

The Accident

1. Have your contact information handy.2. Report the accident to the campus

(your supervisor or the Police) as soon as you can.

3. Do Not Admit Fault.4. Do Not make promises.

The Claim

Their’sVictim’s Compensation & Government Claims

Your’sVictim’s Compensation & Government Claims

Our’sCSU Risk Management – Program

Administrators

Government Claim Booklet

State of CaliforniaVictim’s Compensation &Government Claims Program

Includes Instructions & Claim Form

http://www.governmentclaims.ca.gov/

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

EVALUTE LOSS POTENTIAL

Evaluation Techniques– Frequency/Severity of Claims– Publications/Periodicals/Other

Universities– Political/Litigation Climate– Anticipate

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!

The Challenges We All Face

External:– The Insurance Market– Your vendors– Your constituents– Unions– Auxiliary Organizations

• Foundations• Athletic Corporations• Bookstores• Food Services• Health Centers

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

Risk Management’s Role

Consults Reviews Forecasts Play “what ifs” Thinks worst case

scenarios Recommends

Manages insurance and claims

Looks for process improvement through feedback

Let’s Team Up!

RM&S Takes an Active Role:•G.O.

•Observe•Inquire

•Alert•Collaborate

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