SUBJECT:  Insurance - Property, Liability and Other

PROCEDURE NO.:  2D:01:06A                     DATE:   July  1, 1994

SUPERSEDES PROCEDURE NO.:  2D:01:06A          DATED:  July 1, 1992

A.  General Introduction

    1.  Insurance coverage for buildings and their contents,      
        builder's risk, boiler insurance, surety, travel and      
        accident, and liability are included in this procedure.   
        Administration of this program is primarily the           
        responsibility of Physical Plant and Planning, the        
        Department of Public Safety and the Accounting Office.    
        This procedure does not include medical and hospitalization 
        insurance on individual employees or students.

    2.  The University insurance program functions within the     
        guidelines and procedures of the "State of Tennessee Risk 
        Management Manual" issued by the Department of Finance and 
        Administration.  All insurance matters, i.e. purchases,   
        claims, correspondence, etc., must be routed through the  
        Assistant to the Director of Finance and the Tennessee    
        Board of Regents to the appropriate State official.
    3.  Any insurance questions or problems which are not included 
        in this procedure should be discussed with the Assistant to 
        the Director of Finance in the Office of the Director of  

B.  Request for Purchase of Insurance

    To obtain insurance in special situations not normally covered 
    (see Section D), the following steps should be taken:

    1.  Preferably ninety days before the coverage is needed,     
        submit to the Assistant to the Director of Finance a      
        memorandum describing the items to be covered, the location 
        of the items (address if other than The University of Memphis),
        the period of time coverage is needed, and the amount of the  

    2.  The Assistant to the Director of Finance prepares a request 
        to the Tennessee Board of Regents.  As soon as the permission 
        is obtained, the request for special coverage is forwarded to 
        Purchasing for processing.

    3.  The department requesting the coverage is charged for the 
        cost of the coverage.

    4.  The department acquiring special coverage is responsible  
        for submitting the original policy to the Assistant to the 
        Director of Finance for safekeeping.

    5.  Insurance purchases required by the terms of a grant      
        (ledger 5, Restricted Funds) must follow the above        
        procedures.  The Office of Sponsored Programs will provide 
        written notice to the Director of Purchasing when the     
        terms and conditions of a grant requiring special insurance 
        coverage is being accepted by the University.  The Director 
        of Purchasing will prepare the purchase requisition in    
        cooperation with the grant's project director, specifying 
        the type and length of coverage needed.

    6.  Insurance purchases with Agency Funds (ledger 8) do not   
        require prior TBR approval since the University will not be 
        a named insured party on the policy.  However, the        
        department purchasing such policies is required to sign a 
        disclaimer stating that the University is not included as 
        a named insured party.

    7.  All claims filed against special policies should be routed 
        through the Assistant to the Director of Finance.

C.  Reporting Losses or Damages
    1.  The department head or the responsible official is to     
        notify the Department of Public Safety of all losses,     
        theft, or damages to property, regardless of dollar value 
        of the property (see University Operating Procedures No.  
        2D:01:01H, Inventory and Control Program for University-
        Owned Equipment, and 2D:01:05A, Reimbursement and 
        Responsibility for the Loss or Damage of University   
        Property Due to Negligence, and 2D:06:03A, Lost or Stolen 
        University Property.)

    2.  Uninsured losses including deductible amounts must be     
        provided from the departmental budgets if repairs or      
        replacements are required.

D.  Insurance Coverage Maintained

    1.  All buildings, their contents, and selected improvements  
        other than buildings are insured through the State of     
        Tennessee.  Buildings under construction are covered by   
        "builder's risk" riders.  Separate boiler insurance is in 
        force to cover damage resulting from accidents to boilers 
        owned and operated by the University.  This coverage      
        includes a $5,000 per loss deductible.  Insurance on      
        buildings leased to the University should be provided by  
        the lessor.  
        Equipment, furnishings, and other contents are covered by 
        the State policy with a $5,000 per loss deductible.  
        Coverage is determined by the University equipment 
        inventory plus an additional amount estimated sufficient 
        to cover supplies (such as papers, books, carpets, drap-
        eries, glass laboratory items, and other "non-equipment" 
        items).  The department head or any other official having 
        knowledge of the receipt of gifts or of any other occur-
        rence requiring a change to insurance coverage should 
        promptly notify the Assistant to the Director of Finance.

    2.  Personal Property Not Owned by the University

        a.  Personal property not owned by the University is not  
            automatically covered by the State insurance program. 
            Personal property in the University's custody and for 
            which it is responsible may be included if specific   
            notice is provided.  To include property on loan, being 
            rented, etc., under regular coverage, provide informa-
            tion to the Assistant to the Director of Finance.  
            The information provided must include a statement of 
            value with each item identified separately and signed 
            by both the property owner and a University official, 
            a statement of the time period for which insurance 
            coverage is needed, and a statement indicating where 
            the property will be located while in the University's 
            custody.  This coverage is subject to the same $5,000 
            per loss deductible as the regular insurance.  The cost 
            of this coverage is very small, and departments will 
            usually not be charged.  

        b.  If coverage as specified in D.2.a. is not considered  
            adequate, the property owner should be encouraged to  
            secure his own coverage and include the cost in his   
            exhibition or rental fee.

        c.  Personal property of a faculty or staff member is not 
            insurable by the University.

        d.  The University may be liable for the negligent care,  
            custody or control of personal property.  Any claim for 
            such negligence must be filed with the Tennessee Claims 
            Commission (see Section D.5.) 

    3.  A surety bond covers all employees for $100,000 with a    
        $5,000 deductible for each loss.  All personnel are covered 
        by this policy, including part-time or temporary employees 
        and student employees, during "periods of employment".

    4.  Workmen's Compensation type benefits are provided through
        the Tennessee Claims Commission.  Assistance may be secured 
        from the Department of Public Safety for filing claims.

    5.  Third Party Liability.  All claims against the University 
        come under the jurisdiction of the Tennessee Claims       
        Commission.  For information on filing a claim, contact the 
        Assistant to the President - Legal.  Under special circum-
        stances liability insurance to cover others may be obtained 
        if required by contractual agreements and appropriate approval 
        is secured.

    6.  Other Liability Coverage.  The University does not provide 
        automobile liabilities, the Tennessee Claims Commission has
        jurisdiction to award damages for University employees' 
        negligent operation of a vehicle.  University employees who 
        regularly make use of State-owned vehicles should contact 
        their own insurance agents, if coverage is desired, to obtain
        a rider for liability coverage insuring them personally when
        operating a State vehicle (the University does not reimburse
        employees for this insurance).

        Professional liablility insurance, such as malpractice insur-
        ance, with rare exception, will not be purchased by the State.

    7.  Medical and Travel and Accident Insurance.  This insurance can
        be obtained with proper authorization for such items as inter-
        collegiate athletics, special events such as Junior Olympics, 
        basketball clinics, high school events, swim meets, etc.  (See 
        Section B.)

    8.  Other Insurance.  Requests for any other type of insurance not 
        specifically included in this procedure will be considered 
        individually, as described in Section B.