THE UNIVERSITY OF MEMPHIS OPERATING PROCEDURE 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 Finance. 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 coverage. 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.