Property Loss/Damage Reporting and Reimbursement Policy
The University maintains fixed assets in the form of land, buildings, furniture, machinery, IT and telecommunications systems, research/scientific equipment and other items. Any theft or damage to these assets can result in a material financial exposure to the University due to the cost required to repair or replace an asset and the lost revenue and/or business opportunity incurred while the asset is unavailable for use.
Reasons for Policy
This policy was established in order to establish an efficient and consistent process by which loss to University fixed assets is reported, managed and reimbursed
Responsible University Officer
Executive Director for Risk Management
Who is Governed by This Policy
All University divisions, departments, schools, administrative offices, and affiliated organizations responsible for the care or custody of fixed assets owned or leased by the University or mobile property/equipment for which the University has a contractual obligation to protect against loss.
Exclusions and Special Situations
Some, but not all, buildings leased by the university are covered for property damage by the applicable landlord. Losses to University-owned fixed assets within the buildings are covered by the University's property loss/damage reimbursement mechanism and this policy.
The University has a significant global presence. However, this policy does NOT cover fixed assets located outside the United States or Canada, regardless of whether the asset is owned by any University subsidiary or legal entity established by the University. Coverage for these assets should be maintained locally in country. Contact the Risk Management Department ("RMD") for guidance.
Certain specific types of assets, including but not limited to, fine arts, rare books, manuscripts, property in transit, and vehicles as well as money, stock certificates, and negotiable securities are not covered under this policy and have separate policies which need to be negotiated directly with RMD. Refer to Exhibit A for a detailed listing of allowable and non-allowable expenses and items treated under alternative insurance programs.
Policy Text
Financial Responsibility and Risk Financing
The individual department, school, or division that has been entrusted with the care or custody of fixed assets has ultimate financial responsibility for such assets. The University, through the RMD, has established a common funding mechanism (combination of self-insurance and commercial insurance) to assist responsible departments, schools, and divisions with responding to the financial impact of loss to these assets.
Individual University departments are required to share in the cost of specific allowable losses by paying a $10,000 per department per incident deductible and fully absorbing non-allowable loss expenses. The RMD and/or the University's insurers will reimburse the impacted department(s), less any offsets, for direct and indirect damages incurred as a result of a loss to a fixed asset of the University. The level of reimbursement to the impacted department will be based on compliance with the loss reporting and documentation procedures established in this policy and the determinations of allowable and non-allowable expenses made by the RMD and/or the University's insurers.
At no time will the University reimburse a department for a non-allowable expense related to a potential loss. When an individual loss exceeds the University's own deductible, the RMD reserves the right to delay part of the reimbursement until the University receives the settlement from the insurance company. The University will not reimburse losses related to personal property of individuals, students, faculty, staff, administrators, or other.
All fixed asset owners seeking reimbursement under this policy have the obligation to report the loss to the RMD upon discovery of an occurrence and to cooperate with its investigations and efforts to assess and document the underlying origin and cause of the loss event. Any department seeking reimbursement from the RMD must cooperate with all aspects of the loss management process whether conducted by internal departments or external parties under contract to the RMD.
The RMD has the duty to adjust the University's property loss policies and procedures, as needed, and retains the right to:
- Increase the deductible and departmental responsibility levels in the future.
- Determine which loss related expenses are allowable and which are non-allowable when adjusting claims valued at less than the University deductible.
- Withhold a portion of the reimbursement due to the impacted department when subrogation activities are being pursued to recover expenses from at fault third parties (Subrogation Withhold).
Definitions
Risk Management Department (RMD) - Part of the Office of Treasury; responsible for the financial aspects of insurable and non-insurable risks and litigation suits facing the University and for procuring insurance coverage for all campuses and operations.
Allowable and Non-allowable Expenses - Loss related expenses that are (allowable) and are not eligible (non-allowable) for reimbursement by the RMD or the University's insurers. [See Exhibit A]
Fixed Assets - are comprised of real and personal property: • Real Property - consists of buildings and any items permanently affixed to buildings and land. • Personal Property - furniture, fixtures, office equipment, computer hardware and software, money, valuable papers, telecommunications equipment, research equipment and laboratory machinery, HVAC equipment, emergency generators, and any other property not permanently affixed to the building or surrounding grounds. Personal property can also include similar items leased, borrowed, or under loan to the University.
Loss - any accidental occurrence which has caused permanent or temporary loss of value, either directly or indirectly, to the fixed assets of the University.
Departmental Deductible - the amount ($10,000) that the impacted department is always responsible to absorb on each loss before the RMD will make payment. The deductible reduces the amount that the RMD will reimburse for the total cost of the loss (ex: $100,000 total allowable loss value, the impacted department must cover the first $10,000, the RMD reimburses $90,000).
Departmental Financial Responsibility - the portion of the total financial value of a loss that the impacted department is responsible to fund from its operating budget. This includes but is not limited to applicable deductibles and any non-allowable expenses. The departmental responsibility can also include any portion of a given loss that arises from, is aggravated by, or is due entirely to the department's failure to comply with mandatory conditions of this policy and its associated procedures or the terms of any applicable insurance coverage.
Subrogation Withhold- the portion of the total reimbursement due to the impacted department that is withheld by the RMD when subrogation activities are being pursued to recover expenses from at fault third parties. The subrogation withhold, less the application of any departmental responsibility offsets, will be paid to the impacted department following the completion of subrogation activities.
Pre-loss Condition - state that your property is in before the loss occurs. Departments must replace damaged property with material or equipment of like kind, quality, and functional equivalent. This would not include upgrades or major renovations not related to loss.