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Policy: VII.H.1

Issued: July 1, 1999

Owner: Director of Risk Management

Latest Revision: January 2, 2001

This policy has been migrated to the standardized format.

1.0 Purpose

This policy describes the general responsibilities of the Department of Risk Management, the general types of coverage provided, and the responsibiities of University employees

2.0 Policy [Top]

The Department of Risk Management is charged with the responsibility of administering the risk management programs for the University, including procurement of insurance and administering claims associated with the University's risk management program. 
The University, for its own protection and for the protection of its employees and agents as well as the general public, maintains an umbrella of insurance protection as a part of its risk management program.  Coverages include general and professional liability, property damage, vandalism, theft, boiler and machinery, watercraft, aircraft, automobile liability and physical damage, telephone fraud, workers' compensation, and other specialized coverages as may be necessary. 
This policy briefly outlines the coverages being maintained, but because of the complexity of the various coverages, it does not detail all of the exclusions and exceptions.  Please call the Department of Risk Management (4-3055) for any inquiries concerning insurance coverage, or to report any claims relative to bodily injury or property damage as well as to report any other incidents that may result in financial loss to the University. 
As a State agency, the University participates in certain insurance programs which are part of a State's Risk Management Plan.  The University's Department of Risk Management has the responsibility of procuring insurance or developing self-insurance programs that are not provided by the State Plan. 
Employees are encouraged to call the Department of Risk Management to discuss any perceived risks that they may encounter throughout the University.  The University's Risk Management Program deals not only with insurance and claims, but also with coordinating attempts to prevent or reduce future losses. 
Whenever any type of loss occurs, except those dealing with vehicles, an Incident Report Form should be completed and sent or faxed (2-2635) to the Department of Risk Management in Carruthers Hall.  For incidents dealing with vehicles, an Automobile Loss Notice Form should be completed and sent to Risk Management. 
Reference Procedures: 
7-80 "Completing Insurance Incident Form" 
7-81 "Completing Automobile Loss Notice" 
7-82"Reimbursing Housing Resident Claims" 

The State Division of Risk Management (DRM) has developed a Property Insurance Plan, which is comprised of self-insurance and commercial insurance.  The Plan covers all State-owned buildings, contents, and related contents and equipment on or off grounds, loss of business-related income, and in certain cases, extra expense incurred to expedite repairs.  The Property Insurance Plan also includes coverage for Boiler and Machinery losses, which represents a combined program of coverage that will reimburse State agencies for repair or replacement of lost or damaged property from the perils of fire, lightening, windstorm, theft, flooding, sudden and accidental breakdown of machinery, and other causes (see Boiler & Machinery section for more information).
All State-owned buildings and contents are covered for repair or replacement, but all losses are subject to a departmental $1000 deductible.  The department responsible for the property incurs the deductible. When multiple departments are involved in one loss, the deductible is shared by all departments involved, and must be paid from departmental funds.  State and University procurement guidelines must be followed after the department files a claim to have property repaired or replaced.  When a single loss exceeds the departmental deductible of $1,000, the University will pay up to the next $99,000 for that loss.  If a loss exceeds $100,000, the State insurance program begins to pay for the loss above the $100,000 threshold. 

2.2.1 Personal Property
Personal property belonging to employees or students that is located on grounds is not covered by State or University property insurance, unless their property is damaged through some negligence on the part of the University.  It is strongly recommended that individuals having personal property at the University contact an insurance agent for appropriate insurance coverage, such as homeowners or renters insurance, to protect their personal possessions. 

2.2.2 Domestic or International Shipments
The State's Property Insurance Plan also insures State property, and in some cases the property of others, while located away from the University or in transit anywhere in the world, with the exception of certain high-risk countries.  When shipping State property or property belonging to others valued in excess of $10,000 to an off-site location, the Dean or Department Head is required to write a memorandum to the Director of Risk Management, which authorizes the removal of the property from the University's premises.  The memorandum must contain a complete description of the equipment, its estimated replacement value, its intended location, and the length of time it will be away from the University as well as any other pertinent information relevant to the shipping of equipment.                     

2.2.3 Objects of Art or Antiques
The Department of Risk Management requires departments possessing objects of fine art or antiques to provide a full description of the object, its value with a valid appraisal when possible, and the location of the item.  Fine arts and antiques are covered at their appraised or stated value.  Since a loss is more difficult to adjust with appraisals attempted after an article is damaged or stolen, it is strongly recommended that evidence of the replacement value of such items be obtained in advance and stored in an off-site location. 

2.2.4 Boiler and Machinery
This is specialized coverage for the replacement or repair of such items as boilers, fired and unfired pressure vessels, refrigerating or air conditioning systems along with any piping and its accessory equipment, and any mechanical or electrical machine or apparatus used for the generation, transmission or utilization of mechanical or electrical power.  There is coverage whenever there is a sudden and accidental breakdown of the items listed above or any parts of those items.  At the time the breakdown occurs, it must manifest itself by physical damage to the object that necessitates repair or replacement. 
The Department of Risk Management should be notified within 24 hours of damage or loss.  Departments are responsible for paying the deductible, which is the first $1,000 per claim.  The University is responsible for the next $99,000 of loss.  The State's program of insurance begins to pay when a loss exceeds $100,000. 

2.2.5 Reporting Losses
Report all thefts to the University Police Department immediately. A completed insurance incident report form must be sent to the Department of Risk Management within 48 hours of  discovering any loss of state property when it is anticipated the loss will exceed $1,000, or if the loss is caused by a third party. 
Prompt reporting and full documentation compliance will expedite recovery for losses incurred.  Late reporting or delays in repair or replacement documentation can delay or forfeit reimbursement. Notice of loss must be made to the Department of Risk Management immediately upon discovery. 


Under the State Risk Management Plan, the Division of Risk Management administers a self-insured liability program, providing tort insurance coverage for the State, its agencies, and its employees and agents.  A brief description of the coverage is provided below: 

The Plan will pay all sums, except as herein limited, which the Commonwealth of Virginia, its departments, agencies, institutions, boards, commissions, officers, agents, or employees . . . shall become obligated to pay by reason of liability imposed by law for damages resulting from any claims arising out of any acts or omissions of any nature while acting in an authorized governmental or proprietary capacity and in the course and scope of employment or authorization. 
The amount recoverable by any claimant with respect to the Commonwealth of Virginia, its departments, agencies, institutions, . . . shall not exceed one hundred thousand dollars ($100,000) per claim.  This limit shall not be applicable to any claim on causes of action other than those established by Virginia law.  For claims on causes of action other than those established by Virginia law the amount recoverable shall not exceed two million dollars ($2,000,000) per claim.  The amount recoverable by any claimant with respect to Commonwealth of Virginia officers, agents, or employees . . . shall not exceed two million dollars ($2,000,000) per claim. 
All University operations conducted on University property, in owned and leased buildings, or at sites located away from the University are covered for authorized University business.  This coverage is usually to provide protection for acts of negligence for which the University and/or its employees and agents may be held legally liable.  It should be noted, however, that there may be no coverage if it is determined that liability was incurred by reason of (a) acts of fraud or dishonesty by the Covered Party, or (b) acts of intentional, malicious or willful and wanton misconduct by the Covered Party.  Report any incidents, accidents, or unusual occurrences to the Department of Risk Management immediately. 

2.3.1 Foreign Liability
Comprehensive general liability coverage is provided to faculty, staff, and students on overseas or other foreign assignments.  It covers third party general liability claims for bodily injury and/or property damage, professional liability, and automobile liability.  Questions or reports of incidents should be directed to the Department of Risk Management. 

2.3.2 Errors and Omissions Liability
The Board of Visitors and University officials, employees, and agents are also protected against negligent acts or omissions which result in financial loss or damages to individuals or organizations that do not directly relate to bodily injury or property damage.  Such acts or omissions usually result from decisions that are made by University representatives in their authorized capacity to do so which bring about allegations of damages incurred by a third party.


2.4.1 Liability Coverage
State owned vehicles are insured for liability coverage up to $2,000,000 per claim.  This means people who use University vehicles in the scope of their employment or authorization to conduct University business are protected up to two million dollars for negligence resulting in bodily injury and property damage to third parties.  However, individuals will not be covered for acts of intentional, malicious or willful and wanton misconduct in the use of a vehicle.
Note: Report any incident or accident involving State owned or leased/rental vehicles used on University business to the State Police immediately (call University Police if accident occurs on Grounds) and to Crawford and Co. (1-866-219-6120)--identify yourself as an employee of the Commonwealth of Virginia. An Auto Loss Notice must also be submitted to Risk Management within 48 hours of an accident. Occupants' personal possessions are not covered by this insurance if lost or damaged in State vehicles.

2.4.2 Physical Damage Coverage
With regard to physical damage coverage, the University maintains a self-insurance program to pay for damages to University owned vehicles.  Departments have the option of insuring their vehicles in this program if the actual cash value of the vehicle is less than $5,000.  However, all vehicles valued at $5,000 and above must be insured through the University’s self-insurance program to pay for damages to these vehicles, and the department having responsibility for the vehicle must pay the first $1,000 of loss for each claim.  A description of accident procedures should be located in each State vehicle (see “note” under the Liability section above). 

2.4.3 Personal Vehicles
When an employee of the University is driving his or her personal vehicle on University business, the State's automobile insurance plan applies only after the limits of liability on the employee's personal auto policy have been exhausted.  The State policy, however, does not apply toward physical damage to personal vehicles.  Individuals should have physical damage coverage, such as comprehensive and collision, on their personal vehicles if they want insurance coverage for damages they may incur. 

2.4.4 Rental Vehicles
When an employee of the University is driving a rental car on University business, the State's automobile insurance coverage applies only after the rental agency's liability coverage is exhausted.  The State's liability insurance program will respond to physical damage incurred by leased vehicles. Employees should not buy additional insurance offered by the car rental agency if on University business, because its purchase is not reimbursable.  However, this does not apply to leasing vehicles in a foreign country.  When leasing vehicles in another country, except for Canada, it is advisable to purchase liability and physical damage insurance at the time the vehicle is rented.  Purchasing insurance in the foreign country where the vehicle is to be used makes the handling of automobile claims much easier.
If an accident occurs in a rental car, immediately call the police, the rental  agency, and Crawford and Co. (1-866-219-6120).  The driver should indicate that he or she is an employee of the Commonwealth of Virginia. An Auto Loss Notice should be sent or faxed (2-2635) to the Department of Risk Management in Carruthers Hall. 
Contact the Department of Risk Management with coverage concerns when
renting vehicles or driving state vehicles in a foreign country. 

Health care professionals, residents, house staff, and health care professional students are provided medical malpractice coverage for those acts or omissions arising out of the course of their employment or authority.  The amount recoverable by any claimant for claims involving an act or acts of medical malpractice shall be limited to  $1,500,000 for each medical incident.  Please also be advised that per the Virginia Code (Section 8.01-581.15), the medical malpractice cap will increase again on July 1, 2000.  On that date the cap will increase by $50,000--and it will increase by $50,000 each July 1 thereafter until July 1, 2007.  On July 1, 2007, and July 1, 2008, the annual increase in the cap will be $75,000 each year.  The July 1, 2008, increase will be the final annual increase in the medical malpractice cap, unless new legislation is passed in the future. Coverage is not provided for non-University activities, nor is coverage provided to faculty under contract with the University through the Health Services Foundation.  Questions concerning Professional Liability coverage should be directed to the University Risk Management Department (4-3055). 
Report all medical incidents, claims, or potential medical malpractice claims arising out of Medical Center Operations immediately to Medical Center Risk Management (4-5595).  Please reference Medical Center Policy 132 for further information on reporting medical incidents. 

The University maintains aviation liability insurance on its owned aircraft to cover bodily injury and property damage for up to $25,000,000 per occurrence, including passengers (excluding employees covered by workers’ compensation), arising out of the ownership, maintenance, or use of its aircraft.  Owned aircraft are also insured for all risk physical damage coverage to the aircraft. 

The University maintains marine insurance to provide hull and related equipment coverage to pay for physical damage to its owned watercraft over 26 ft. in length that are licensed to operate in open waters.

Workers' Compensation provides statutory coverage for employees' injuries during the course of their employment.  The Department of Human Resources administers the program and questions should be directed to that department ( 4-8939).  Questions regarding workers’ compensation for employees in the Medical Center should be directed to Medical Center Employee Relations (4-5971).

The Faithful Performance of Duty Bond is a State insurance program. This program provides all State agencies with reimbursement for loss of money or assets caused by an employee's failure to faithfully perform assigned duties and to properly account for money or property entrusted to the employee's position.  Computer fraud caused by University employees is also covered under this Bond.  University employees and agents are bonded in the amount of five hundred thousand dollars ($500,000) through the State’s self-insurance program, and the University maintains two million dollars ($2,000,000) of excess insurance above this amount.  Notify the University Police, the University Internal Audit Department, and the Department of Risk Management within 24 hours of discovering a loss.         

This policy covers the University for liability arising out of a nuclear accident, incident, or occurrence at our facilities or in the course of transporting nuclear material.  The limit of liability for this insurance is currently set at $250,000.   

The State program covers the University's loss of money, securities, or checks by actual destruction, disappearance, forgery, or wrongful abstraction (robbery or theft), either on premises or in transit.  The policy does not cover employee dishonesty (covered under the Faithful Performance Bond) or accounting errors.  There is a $1,000 deductible per claim, which is the responsibility of the department incurring the loss.  The limit of coverage provided by the State Plan is $300,000 per occurrence.  The University maintains excess crime insurance above the State's limit in the amount of  $2,000,000.  Notify the University Police, the University Internal Audit Department, and the Department of Risk Management within 24 hours of discovering a loss. 

The University maintains Telephone Fraud insurance coverage for those situations where unauthorized individuals gain access to the phone system from a remote location in order to gain access to outgoing long distance telephone service, which results in a financial loss to the University.  The maximum this policy will pay in any policy year is $300,000.  There is a $10,000 per claim deductible, with a maximum per year deductible of $30,000.  Report all claims or potential claims immediately to the University Police, the Internal Audit Department, and the Risk Management Department. 


3.0 Definitions [Top]

4.0 References [Top]

5.0 Approvals and Revisions [Top]

       Previous version in effect from 7/1/99 to 1/2/00 available in policy archive.

Maintained by University Comptroller
© 2000 by the Rector and Visitors of the University of Virginia