10.2 Risk Management


The university is to be protected against loss or losses which in the aggregate, during any financial period, would significantly affect university property, personnel, budget, or the ability of the university to continue to fulfill its role as an educational institution in the State of Michigan.

Risk Management may be defined as the continuous process of identifying, minimizing or controlling the adverse effects of these events of uncertain outcome. More specifically, risk management is the acceptance of responsibility for identifying and managing exposures to loss which are created by the university's activities, and selecting the most advantageous means of financing those losses that do occur. In contrast to this concept, insurance management involves responsibility for only those risks which are actually insured against. Thus, the risk management function includes, but goes far beyond the bounds of strict insurance management.

Every employee is a manager of the risks within his/her scope of employment, i.e., has the responsibility to continuously identify, minimize, and/or control all exposures to loss, personal injury to visitors or employees, trip hazards, etc.

The Office of Risk Management has responsibility for directing and coordinating all risk functions. It is directly responsible for:

  1. Identifying, analyzing and assessing loss potential and determining methods of managing risks, including avoidance, reduction, retention and transfer.

  2. Researching, developing, negotiating and implementing loss funding and risk financing mechanisms, including commercial insurance, self-insurance and alternate mechanisms as appropriate.

  3. Directing the investigation of all university losses, incidents and claims.

  4. Developing and maintaining comprehensive inspection and incident reporting systems to evaluate conditions conducive to loss and incidents involving potential claims.

  5. Advising senior university administration on potential sources of loss and recommending methods of managing these risks.

  6. Developing loss prevention and educational programs concerning loss prevention in conjunction with university departments when appropriate.

  7. Selecting insurance agents, insurance companies, insurance consultants and service firms.

  8. Preparing insurance specifications for requesting insurance proposals.

  9. Managing the negotiation, placement and administration of the university's property, liability and workers' compensation insurance programs.

  10. Designing, implementing and administering self-insurance programs.

  11. Reviewing insurance coverages, costs and exposure levels.

  12. Formulation of guidelines to identify insurance provisions as part of agreements with suppliers.

  13. Reviewing proposed leases (non-standard), contracts, plans for new construction or major renovations for Risk Management purposes.

  14. Establishing and monitoring the University Loss Prevention Committee.