This manual is intended to provide basic information for Clemson University employees concerning property and liability insurance, bonding, and proper claims handling procedures.
The office of Risk Management is available to answer any employee questions concerning this manual or any other matter concerning insurance. The office telephone number is (864) 656-3354.
E-309 Martin Hall
Clemson, South Carolina 29634-5339
The goal of Risk Management is to coordinate efforts with all departments on and off campus to ensure the protection and preservation of Clemson University human, physical and financial assets.
This goal is accomplished by identifying potential human, physical, financial and natural losses and evaluating the best method for handling the risk whether it is risk avoidance, prevention, assumption or transfer.
Property-Liability Insurance and Bonding
- The Office of Risk Management is responsible for administering the property and liability insurance and surety bond programs for the University. In this capacity this office acts like an insurance agency for the University by soliciting quotations for property, liability, and/or surety coverage desired by the University and processing all claims. In addition, this office invoices the various departments for their respective pro rata share of the total premiums. In determining the department's premiums, consideration is given to the value of property assigned, number of departmental employees, liability exposures, etc.
- The major insurance policies are: Building and Personal Property for on-campus buildings and equipment, off-campus buildings and those undergoing major renovation; business interruption protection against rental income loss for the facilities committed to the amortization of housing revenue bonds; inland marine floaters providing all physical risk damage coverage for the contents of both the Calhoun Mansion and the Hanover House, the band instruments and uniforms, TAPS camera equipment, agricultural equipment; a livestock mortality floater; aircraft hull and liability protection; automobile fleet coverage for the vehicles; physical damage and liability coverage for University watercraft; liability coverage for all University employees; medical employee professional liability; commercial crime insurance on all University employees; state constable bonds, and public official bond, Directors amd Officers Liability Insurance.
The responsibility for the procurement of property and liability insurance, and surety bonds is assigned to the Risk Manager, Office of Risk Management.
Insurance policies are purchased through the Insurance Reserve Fund, S. C.. Budget and Control Board, as required by S. C. law. Policies not available from the Insurance Reserve Fund are obtained by competitive bid.
C. Operating Procedures
1. Purpose of Manual
The purpose of this section is to provide a convenient reference and a basic guide for the departments as to the types of property and liability insurance and bonds carried by Clemson University and to familiarize personnel with the correct procedures for requesting insurance and filing claims.
2. Request for Insurance or Filing a Claim
Whether a department has need for property or liability insurance, is seeking bond coverage or filing a claim against and existing policy, the department head or the research and education director should call 656-3354 or forward a memorandum directly to the Risk Manager, Office of Risk Management, with detailing the department's insurance requirements or giving details of the claim. In the event a claim or suit is brought against the University, the department head should immediately forward every demand, notice, summons, or other process received to the Risk Manager, Office of Risk Management.
3. Specific Coverage
Each of the University's major property and liability insurance policies and bonds will be briefly described in the following sections. Questions or comments relating to these coverage should be directed to the Risk Manager, Office of Risk Management, by calling 656-3354.
a. Building and Personal Property
1) The Building and Personal Property policy written through the State's Insurance Reserve Fund protects University buildings and their contents against the direct physical loss of, or damage to, covered buildings and contents resulting from any covered cause of loss.
2) All University buildings subject to damage from these perils and of a value warranting the cost of insurance will be insured at replacement value. All inventory items in excess of $1,000 are insured under the contents portion of the policy. It should be noted that personal property belonging to any individual, employed or otherwise, should be insured by the owner. University departments are billed for their pro rata share of the premium annually.
3) Reporting of Loss or Damage:
Directors of Research Education Centers must notify the Risk Manager, Office of Risk Management, by telephone (656-3354) within twenty-four hours of any loss or damage and confirm this verbal communication, within five working days by completing the University's Building and Personal Property, CUBO-501 (see Exhibit 1). The Office of Risk Management will forward two blank copies of this form to the department reporting the loss or damage.
4) Annual Review of Building Valuations:
Present procedures provide an annual review of Clemson University buildings by the department heads to re-evaluate the desirability of insuring each building and reassessing valuation. This action takes place in the month of April preparatory to the re-issuance of the policy on July 1.
Replacement values on buildings are determined by the South Carolina Property Appraisal office. Buildings are insured for 80% replacement cost for compliance with the coinsurance clause of the property policy.
5) Departments are responsible for maintaining an inventory list of all items less than $5,000. Proof of insurance may be required on these items in the event of a loss.
b. Builder's Risk
1) This policy is written through the State's Insurance Reserve Fund, and its protection is identical to that provided by the Building and Personal Property Policy. Coverage is provided only during the construction period and should be made effective at the time the first construction materials are delivered to the site.
2) A request for Builder's Risk Insurance should be in application form (see Exhibit 2). This form is available from the Office of Risk Management and should give the following information:
a) Cost of building or renovation
b) Building name and number
c) Building location
d) Effective date
e) Approximate date of completion
f) Name and Address of architect
g) Name and address of contractor
h) Detailed description
i) Number of stories and rooms
ii) Type of building construction
iii) Type of roof construction
iv) Type of floor construction
v) Square footage of building
c. Business Interruption
In addition to the direct damage incurred from fire and related perils, it is also necessary to be concerned with the consequential results of the damage, such as the loss of use, of rental income from facilities until they can be repaired or replaced. To guard against such losses, the University covers the residence halls and student apartments with a Business Interruption Policy because the revenues from these facilities are pledged to the retirement of the Student and Faculty Housing Revenue Bonds. Protection is provided for loss of revenue from these buildings caused by any of the perils covered by the Building and Personal Property Policy.
d. Inland Marine Insurance
1) The basic contract for all inland marine floaters is the scheduled property floater policy. It provides direct physical damage protection to the scheduled property wherever it may be located, subject always to the territorial limits of the contract. The only risks not included are those specifically named in the listed exclusions of the policy.
2) The University currently uses this type of contract to insure the band instruments and uniforms, the historical furnishings in both the Calhoun Mansion and the Hanover House; TAPS camera equipment,, agricultural equipment and other moveable equipment.
e. Livestock Mortality Floater
1) This type of insurance is a form of term life insurance on scheduled animals and provides protection against loss by death resulting from all natural causes, disease, accidental injury, fire, or lightning occurring anywhere within the boundaries of the United States and Canada. This coverage is written only as needed. Contact the Risk Manager at 656-3354 if coverage is needed to cover an animal. }
2) The University is currently using this type of policy to protect its interests and the owners of horses and bulls that are temporarily located at the University for research.
3) In the event of sickness, injury or death of an insured animal, immediately notify the Risk Manager, Office of Risk Management at 656-3354 and provide the following information:
a) Name of animal
b) Nature of sickness, injury or cause of death
c) Date injury or sickness was first discovered
d) Name and address of attending veterinarian
f. Aircraft Hull and Liability
1) The Aircraft Hull and Liability Policy is similar to automobile insurance in that it provides protection against physical damage to the hull, bodily injury and property damage liability, and medical payments for each passenger and pilot.
2) University-owned aircraft, like other State aircraft, are insured under a master policy through the South Carolina Insurance Reserve Fund. Excluding any use for a charge made to others or operation by a non-certified and approved pilot or operation outside of the territorial limits of the United States, Canada, Mexico, the Greater and Lesser Antilles, Bermuda, and the Bahamas, this aviation policy provides all risk protection against direct loss or damage to the hull, third party liability coverage, and medical payments, including coverage for the pilot.
g. Comprehensive Automobile Liability Insurance
The University's fleet of vehicles is covered by a Comprehensive Automobile Liability Policy which contains essentially three parts:
- Bodily injury and property damage liability
- Medical payments
- Protection against uninsured motorists
All of the University's vehicles licensed for road use carry bodily injury and property damage liability insurance.
1) Bodily Injury and Property Damage Liability
a) The basic promise of the insurance company in the liability portion of the fleet policy is to pay on behalf of the University for liability losses for both injury to other persons, including death, and damage to the property of the other persons arising out of the ownership or use of vehicles covered in this policy. "Gratuitous payments are not a part of liability coverage; a legal responsibility must exist before the insurer will pay the injured party under the provisions of the contract." Also, the driver, whether an employee or a permissive user, of a University vehicle is protected against claims for loss, damage or injury to third parties insofar as he or she is acting as an agent for the University while on University business. In addition to the stated limits of liability of this policy, the insurer is obligated to defend the insured and make certain other supplementary payments, for example, the cost of investigation and the cost of defense.
b) The University's comprehensive automobile liability policy provides only excess liability protection for non-owned and hired automobiles. This is excess insurance over any other valid insurance carried by the employee on his own vehicle or by the rental agency on its vehicles. Primary liability coverage is not provided under this policy to the employee while driving his or her own vehicle on university business. When vehicles are rented or hired for short periods, excess liability coverage and physical damage insurance is included in the university's fleet policy. Therefore, employees renting a vehicle from a rental agency for university business should not purchase any additional insurance if offered.
2) Medical Payments
a) Under the fleet policy, medical payments coverage applies for expenses for necessary medical expenses and funeral services to or for a non-employee who sustains bodily injury caused by an accident. The coverage pays for only those expenses incurred within three years from the date of the accident. Technically, this is not liability insurance since it pays promptly without having to establish legal liability. However, if an employee of the University is injured while driving or riding in a University vehicle while on University business, he or she is covered under Workers' Compensation Insurance and not under the Medical Payments section of the fleet policy.
b) It should also be pointed out that "Payments made under the Medical Payments coverage do not prevent the injured person from later deciding that he or she is entitled to further payment on the basis of liability. He or she must then, of course, prove the legal liability of the insured."
3) Physical Damage
a) There are several types of physical damage coverage, but they are all involved in protecting the owner's vehicle. The coverage range from "collision" with another object, except animals or birds, and "all risk" physical damage protection to more limited coverage for specific perils such as fire, lightning, theft, etc.
b) This coverage should not be confused with property damage liability, which is the damage to the property of third parties for which the University may be held legally liable.
c)While only a limited number of University vehicles are insured against comprehensive and collision, this type of loss is a good illustration of the concept of "subrogation". For example, if the University collects for damages (less the deductible) from an insurance company for one of the University vehicles, then our insurer may take over the rights to sue the responsible party and recover the payment made to the University. Whether or not the insurance company would actually bring suit depends on many factors, including the accident facts, the amount of the loss, etc.
4) Uninsured Motorists
Uninsured motorists coverage protects the occupants of a University vehicle from bodily injury and the vehicle itself from property damage caused by a negligent, but uninsured, or hit-and-run driver. Our insurance company would pay for losses up to the limits specified in the financial responsibility law of South Carolina, i.e., $15,000 each person, $30,000 each accident for bodily injury liability and $5,000 each accident for property with a $200 deductible.
5) Annual Review of Motor Vehicle Insurance
Present procedures provide for an annual review of Clemson University vehicles by department heads in verifying the accuracy of data on vehicles insured.
6) Motor Vehicle Accident Reports and Claims Procedures
a) When an accident occurs, the driver of a University vehicle should notify the police immediately. If the accident occurs on campus, the University Police should be notified. If the accident occurs off campus, the driver should contact either the city police or highway patrol.
b) Individuals involved in an accident should not admit responsibility.
c) The University's Motor Vehicle Accident Report Form, CUBO-505 (see Exhibit 3), is kept in the glove compartment of each vehicle. If the driver is able, he or she should complete this form at the time of the accident, being particularly accurate about the name and address of the owner and driver of the other vehicle, his or her insurance agent and insurance company, and any witnesses.
d) The Risk Manager, Office of Risk Management, should be notified of any accident resulting in bodily injury or major property damage by telephone as soon as possible at (803) 656-3354 during office hours on weekdays. At any other time call the University Switchboard at (803) 656-3311.
e) Immediately upon return to work, the University driver should complete the Motor Vehicle Accident Report Form and forward to Office of Risk Management.
f) The drive of a University vehicle involved in an accident in South Carolina resulting in bodily injury or death or in which total property damage exceeds $1,000 is responsible for forwarding the FR10 (Financial Responsibility Form) to the Office of Risk Management. The Office of Risk Management will complete the required insurance information and forward to the S. C. Public Safety Department. Failure to comply with this State regulation may result in suspension or revocation of the individual's driver's license. If the accident occurs in another state, the driver should comply with the applicable regulations. The Office of Risk Management will provide assistance in completing any required forms.
g) As soon as the Risk Manager, Office of Risk Management, receives an accident report, a preliminary evaluation is made to determine which party is at fault. In the cases where it appears that the University driver is either responsible or responsibility cannot be easily determined, our insurance adjuster is notified and provided a copy of the University's accident report and any other related information. In some cases, the Office of Risk Management will contact the other party to obtain two repair estimates and mail them to our adjuster. Normally, a representative of our insurance company will settle the claim and forward verification to the Office of Risk Management, for filing.
h) If the other party is at fault, department heads should get two repair estimates for the University's vehicle and forward them to the Office of Risk Management. The estimates will then be forwarded to the insurance company or adjuster representing the other party. The Office of Risk Management will follow through with representatives of the other party until final settlement is made.
h. Watercraft Insurance
1) Watercraft liability and physical damage may be carried on the departmental watercraft by forward full description and value of the equipment to the Office of Risk Management.
2) The University's watercraft policy provides all-risk physical damage coverage (subject to a few standard exclusions) for the University's boat, motors and trailers. The liability for injury to others persons or damage to their boat or other property is covered under the Tort Liability Policy issued by the State Budget and Control Board, Division of General Services. The bodily injury and property damage liability limits are combined into one single limit (see employees liability).
i. Employees Liability
1) Employee liability insurance has been secured by the University for the benefit and protection of the Board of Trustees, Faculty, Staff, and Student Employees who may be legally liable to third parties who are injured or killed as a result of actual or alleged negligence of the insured in the performance of his or her regularly assigned duties. Coverage provided by this insurance include, but are not limited to, such things as protection against false arrest, detention or imprisonment, libel, slander, violation of right of privacy, discrimination, violation of civil or constitutional rights, and use of non-highway licensed mobile equipment. Liability for University watercraft under 26' feet and non-licensed motor vehicles are also covered under this policy.
2) The Office of Risk Management should be notified immediately by telephone (656-3354) of the receipt of any legal notice, summons, or subpoena alleging that a University employee, while in the performance of duties of their employment, caused bodily injury, property damage, or personal injury to a third party.
j. Medical Employee Professional Liability
1) The University provides coverage for the faculty of the College of Nursing, athletic trainers, camp nurses and the employees of Redfern Health Center, while acting within the scope of their duties, against professional medical liability through a policy insured through the Insurance Reserve Fund, Division of General Services.
2) This policy provides coverage for liability arising out of malpractice, error, or mistake made in rendering or failing to render medical, surgical, dental, or nursing treatment, the furnishing or dispensing of drugs or medical, dental or surgical supplies or appliances including the furnishings of food or beverages in connection therewith.
k. Ambulance Liability
1) The University provides coverage for the E.M.T.'s that operate the ambulance, while acting within the scope of their duties, against liability through a policy issued by the Insurance Reserve Fund, Division of Insurance Services.
2) This policy provides coverage for the ambulance attendants for liability arising out of performance of professional services rendered or which should have been rendered, during the policy period, and shall have the right and duty to defend any suit against the insured seeking damages.
l. Crime Insurance and Suretyship
"Crime insurance, or as it is sometimes called, dishonesty insurance, pays an owner for the loss of his property due to its wrongful taking by someone else. The related field of suretyship is partially based upon the dishonesty peril but also involves a broader guarantee of satisfactory performance of duties by various persons." Criminals taking property (including money) are either 1)members of the public or 2) employees. Crimes against property, except those committed by employees, are included in what the insurance business calls burglary - theft insurance. Employee dishonesty, on the other hand, is the basis of the fidelity bond business, an important part of suretyship.
1) Comprehensive Crime Insurance
a) This contract, better known as the Commercial Crime Policy, was developed to provide the broadest possible crime protection by combining burglary and fidelity coverage in a single contract.
b) Clemson University's Commercial Crime Policy protects against employee dishonesty, loss of money and securities on the premises, loss of money and securities off the premises, depositor's forgery, robbery, safe burglary and computer fraud.
a) "Under the terms of s surety agreement, or bond, one party becomes answerable to a third party for the acts or neglect of a second party. The party holding himself responsible is the surety, and the one for whose debt or obligation the surety is responsible is the principle debtor, or more commonly referred to as the principal or obligor. The person protected by the agreement is called the obligee." In short, the surety agrees to answer for the nonperformance of the principal. However, the failure of the principal to perform a specified obligation may be occasioned by things other than dishonesty, such as incompetence or negligence.
b) Bonding companies generally divide bonds into two classes: 1) fidelity and 2) surety. The basic difference between a fidelity and a surety bond lies in the nature of the obligation. "In the case of a fidelity bond, the obligation of the employee to be honest with his employer is implied rather than contractual." Under fidelity bonds, the bonding company reimburses the employer for dishonesty losses caused by his employees. "In the case of surety bonds, while a dishonest act may give rise to a loss, it is likewise true that negligence and lack of ability on the part of the principal may create a liability on the part of the surety."
c) It is in the protection offered by surety bonds that states frequently require certain public officials to be bonded. In accordance with South Carolina statutes, each Clemson University security officer and forester is bonded for two thousand dollars before he or she is appointed by the Governor as a State Constable without compensation. The purpose of this bond is to assure "...the faithful performance of his or her duties, for the prompt and proper accounting of all funds that come into his or her hands and for the payment of any judgement recovered against him or her in any court of competent jurisdiction upon a cause of action arising out of breach or abuse of official duty or power and damage sustained by any member of the public from any unlawful act of such officer or patrol officer; provided, that coverage under such bond shall not include damage to persons or property arising out of the negligent operation of a motor vehicle."
d) Also, the treasurer of each institution in South Carolina is required by law to be bonded. Coverage under the bond requires the principal to faithfully perform the duties of the Office as required by law. The Chief Financial Officer is currently bonded to the State.
m. Workers' Compensation
State employees of Clemson University are protected under the South Carolina Workers' Compensation Law in the event that physical injury or occupational illness arises out of and while in the course of performing official University duties.
This law can provide the following benefits for work injured employees:
1) All prescribed medical treatment and prescription charges necessary to resolve the injury or to bring about maximum medical improvement of a permanently impairing condition.
2) Emergency medical transportation when needed. Also, travel mileage reimbursement for medical treatment more than five (5) miles from the employee's residence.
3) Compensation for permanent impairment, serious disfigurement or death.
n. Procedure in the Event of Employee Injury
1) In case of accidental injury, it is an employee's responsibility to notify his supervisor or department head immediately.
Any injury, no matter how slight, must be reported. In the event of loss time, the supervisor should contact the Workers' Compensation Coordinator, Office of Risk Management.
2) Medical Treatment
If the injured employee or his supervisor judges that medical attention is needed, the employee should be directed to a reputable licensed physician. In the Clemson area, the employee should be directed to Redfern Health Center for treatment.
All parties treating a work injured employee should be informed to direct the charges to: State Accident Fund, in care of Clemson University, Office of Risk Management, Clemson, SC 29634-5339.
NOTICE: A work injured employee should not provide group medical insurance (Blue Cross-Blue Shield) information to any agent in the treatment of his injury.
3) Official Reporting of Work Injury
IMMEDIATELY after initial treatment, the injured employee and his supervisor are responsible for preparation of an ACCORD Form, EMPLOYER'S FIRST REPORT OF INJURY. The completed form should be forwarded to the Workers' Compensation Coordinator, Office of Risk Management, within 3 working days after an accident. Failure to give immediate notice may cause serious delays in the payment of compensation and a fine of $100. A supply of these forms should be maintained in each department. Additional forms may be ordered through the Office of Risk Management. (See Exhibit 4).
The Risk Management Department shall insure to the best of its knowledge at the time a claim initially is reported that the injury comes under the provisions of the South Carolina Workers' Compensation Law. The Risk Management Department shall process all correspondence and shall communicate as necessary with all parties concerned regarding medical charges and compensation. The official files on an employee's work injury shall be maintained within the Risk Management Department.