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Insurance

LMC Revised Date

Office of Origin: Purchasing & Risk Management
Date Adopted: 1/24/17
Last Date Reviewed: 5/19/17
Last Date Modified & Approved: 5/19/17, 8/5/17

Lake Michigan College (the College) maintains insurance coverage to protect the assets and resources of the College and mitigate the risk of loss.
Certain risks facing the College are not insurable by nature, or, in other instances, the risk may be assumed by the College where the potential impact of a loss is not considered significant or where cost economies can be realized by retaining or self-insuring the exposures. 

Responsibilities

One of the functions of the College’s Office of Risk Management (Risk Management) is to assess what levels of loss the College can bear without insurance as well as how to mitigate overall risks facing the College.   

It is also the responsibility of Risk Management to support filing and processing of claims with insurance carrier(s) in an expeditious manner.
It is the responsibility of Administrative Services to review contracts and agreements to ensure that the College bears only its proportionate share of any liability or claims that may arise from the agreement, and to ensure that appropriate insurance and other protective clauses are in the agreement.

It is the responsibility of all employees, students and volunteers to report incidents of injury or damage to Risk Management immediately for a determination of whether an incident may be covered under the College’s insurance policies.

Coverages

The following presents a brief description of the insurance policies the College maintains to protect the College’s assets and other resources and mitigate the risk of against loss.
See the most current declaration pages from the College’s insurance company for the limits of liability per coverage.

A) Auto Liability, Auto Physical Damage, & Garage Coverage
This insurance covers potential liability for damages that may be owed to third parties arising out of the ownership, maintenance, or use of an automobile, owned or leased by the College, plus some medical expenses incurred by passengers as a result of an accident in an insured vehicle. 
-Coverages generally include:
-Bodily injury/property damage
-Broad form collision
-Comprehensive auto physical damage
-Covered autos (liability and physical damage)
-Garage liability
-Garagekeepers’ legal liability
-Glass repair
-Hired and non-owned liability (liability and physical damage)
-Personal injury protection
-Property damage buy back
-Property protection coverage
-Rental reimbursement
-Towing
-Uninsured/underinsured motorist

It also covers College-owned or long-term leased vehicles for property damage resulting from collision, theft, and other perils based on a schedule of covered vehicles.
Generally, there is a $500 deductible to be met for this coverage for physical damage due to collision and theft.

Refer to the College’s Travel Policy for guidelines covering short-term rentals of vehicles. 

Use of a personal auto on College business or while traveling to or from College business is covered with the College insurance as secondary (excess) coverage to your personal coverage.

B) Commercial General Liability

This insurance covers the College as well as its officers and its employees when they are acting on behalf of the College and within the scope of their duties for legal liability that might result in damages to third parties as a result of insured occurrences (e.g., accidents).  It generally includes the following coverages:

-Bodily injury / property damage
-Employee benefits liability
-Fire legal liability
-Law enforcement legal liability
-Personal and advertising injury
-Premises medical payments
-Sexual misconduct

This insurance does not provide for automatic medical coverage to injured visitors or for replacement of their damaged property; in order for such coverage to attach, liability on the part of the College must be demonstrated. 

Coverage is not extended to individual employees or officers if the loss or injury is a result of a malicious or intentional act.
Insured incidents can include, but are not limited to, complaints about employment situations or claims for bodily injury or damages occurring on our grounds or while attending a College sponsored event.

C) Property Insurance

This insurance covers all College owned or leased buildings and business personal property (i.e., movable property – College belongings exclusive of land and buildings) as well as property owned by others for which the College is liable from loss due to damage from fire, explosion, theft, smoke, vandalism, flood, earthquake, etc.  Losses to property resulting from wear and tear or lack of maintenance though consequential damage is generally not covered.
It excludes personal property of students, employees, or third parties as well as the loss of currency.

Coverages generally include:
-Accounts receivable
-Builder’s risk
-Buildings and property in the open
-Business income
-Business personal property
-Crime
-Data breach
-Debris removal
-Earth movement
-Electronic data
-Employee dishonestly blanket bond
-Equipment breakdown (boiler and machinery)
-Fine arts (non-scheduled)
-Fire department service charge
-Fungus, wet rot, dry rot and bacteria
-Inland marine (i.e., movable or specialized property)
-Library restocking cost
-Newly acquired business personal property
-Newly acquired real property
-Non-owned detached trailers
-Off premises utility service interruption (direct damage)
-Ordinance of law
-Outdoor property (non-scheduled)
-Personal effects and property of others
-Pollutants clean up and removal
-Preservation of property
-Property in transit
-Property off premises
-Terrorism and school violent acts  
-Valuable papers and records
-Water / flood / wind driven rain

Inland marine includes athletic equipment, athletic uniforms, AV equipment, contractor’s equipment, data/voice technology property, musical instruments, radios, and certain miscellaneous equipment.

Generally, once a deductible of $10,000 per loss incident is met, the coverage includes the cost to repair or replace with property of like kind and quality. 

D) Crime Coverage

This insurance provides coverage for crime losses that are not insured under other policies. Briefly described, commercial crime insurance covers money, securities, and other property against a variety of criminal acts, such as employee theft, robbery, forgery, and extortion and computer fraud.

Coverages generally include:
-Computer fraud
-Employee dishonesty blanket bond
-Forgery or alteration
-Funds transfer fraud
-Robbery or safe burglary of other property (inside the premises)
-Theft of money and securities (inside or outside the premises)

E) Cyber Liability / Data Breach

Most notably, but not exclusively, cyber liability/data breach policies focus on an organization’s liability for a data breach where individual personal information, such as social security or credit card numbers, is exposed or stolen by a hacker or other criminal who has gained access to the College’s electronic network.

Coverages generally include:
-Data compromise response expenses
-Defense and liability
-Legal and forensic IT review

F) Personal Liability – Employees

College employees will be covered up to $1,000,000 under general liability and $5,000,000 for professional liability policies per occurrence. This coverage extends to an employee fulfilling the reasonable requirements of employment whether on or off-campus.

When acting as an agent of the College in community service and/or off campus activities, the employee must seek the approval of the employee's direct supervisor.

The College assumes no liability for an employee's activities or actions unless those activities or actions are within the normal requirements of employment or are otherwise authorized.

G) Personal Liability – Volunteers

A volunteer at a College-sponsored event is covered for medical payments up to $5,000 per person and $25,000 per occurrence while acting for the College on-premises.  This protection is extended to a volunteer while fulfilling the reasonable requirements of the volunteer activity.  A College-sponsored event will be considered an event having the approval of the President or his/her direct designee.

H) Professional Liability

This insurance includes coverage for claims against College officers, faculty, staff, and students who are participating in clinical experiences, so long as the action is within the scope of their duties. 

Coverage is not extended to individuals if the injury is a result of a malicious or intentional act.

I) Educators Legal Liability (Directors & Officers Insurance)

This insurance covers the cost of defense as well as the payment of damages owed to third parties as a result of claims against employees or appointed or elected official of the College, including implicated employees, for actions within the scope of their duties as well as coverage for losses or damages as a result of claims against the administration of the employee benefits plans.  

Coverages generally include:
-Non-monetary relief defense costs (no deductible)
-Special education defense costs (no deductible)
-Wrongful act (subject to $25,000 per claim deductible)

J) Workers Compensation 

Nearly all employers in Michigan are subject to the Workers' Disability Compensation Act (also known as “workers’ comp”.)  The law requires that every covered employer must provide some way of assuring that benefits are paid to its workers if they become injured while on the job. 

This can be done by purchasing an insurance policy from a private insurance company, self-insuring the risk, or joining a group fund.

See the College’s WORKERS’ COMPENSATION procedure adopted August 11, 2014 and BODILY INJURY/PROPERTY DAMAGE/THEFT procedure adopted February 15, 2003 for more information on workers comp insurance.

Indemnification
College staff (“staff” being defined as employee and/or elected or appointed official) may be indemnified, and provided a legal defense, from certain claims that may arise against such staff acting for the College and within the scope of their authority.

If a civil claim or action is brought against former or present College staff for an act or omission of that staff while acting within the scope of his/her professional authority, the College will provide legal representation for that person if necessary by authorizing the College’s attorney to act on behalf of a person being defended or by employing other counsel of its choice or by asserting the College's rights under any insurance policy which requires the insurer to provide the defense.  Alternatively, the College may reimburse the staff for legal expenses reasonably incurred in connection with any civil claim or action.

If the College provides for the legal defense of staff, the College may assume exclusive control over the representation of the person defended, and which includes, but is not limited to, the right to investigate, compromise, settle, and/or pay a claim.  Staff are required to participate in and/or cooperate with the legal defense provided by the College.

If a civil claim and/or action results in a judgment for damages being awarded against staff caused by staff while acting within the scope of such person's official employment and within the scope of such person's authority, the College will indemnify the staff and will pay, settle or compromise the judgment. 

The College will not, however, indemnify or provide legal representation to any former or current staff in connection with any civil claim or action that arises out of:

• an act or omission that is outside the scope of employment or authority of the staff.
• the willful misconduct or gross negligence of the staff.
• an intentional tort or fraud of the staff.
• any act and/or omission of any staff while under influence of intoxicating liquor or narcotic drugs.

The College will also not indemnify or provide legal representation to any former or current staff in connection with any civil claim or action if the staff fails, in the sole discretion of the College, to participate in and/or cooperate with the legal defense offered by the College.

The College retains the right to assert all available defenses to any claim made against it, and nothing in this policy will be construed to be a waiver of any defense, including but not limited to governmental immunity, available to the College or its staff.

Certificates of Insurance

A certificate of insurance is a document used to provide evidence that an entity is insured.  The College may be requested by outside parties to provide evidence of insurance, for example to owners of premises or equipment rented or leased to the College, hospitals or other locations accepting students in clinical placement, equipment or fine arts on loan to the College for display or other usage.

Requests for a certificate of insurance should be made in writing to Risk Management.  

Vendors/Contractors Insurance Requirements

The College requires that certain vendors and contractors working for the College have a minimum amount of insurance.  These requirements vary depending on the nature and hazard of the work being performed.

Risk Management can provide guidance on minimum insurance requirements and when a certificate of insurance is required from a vendor or contractor.  

Claims Procedures:

The following presents a brief description of the College’s procedures for filing or reporting a claim.

It is important that you notify Risk Management to determine if a particular incident of injury or damage is or may be covered under these or other insurance policies. 
 
- See the College’s BODILY INJURY/PROPERTY DAMAGE/THEFT procedure adopted February  
15, 2003 for more information reporting injuries, property damage, and theft.

 - Although some incidents or claims may not be eligible for insurance coverage, ALL incidents involving property damage, theft, disturbances, etc., must be reported to Director of Public Safety using the Claim/Incident Report.

 - If in doubt, call Risk Management or Director of Public Safety to determine whether the event or situation merits reporting.

 - Any event or situation that could be reasonably supposed to result in an insurance or legal claim should be reported immediately to Risk Management. 

 - All legal papers (e.g., summons, complaint) or claims (including any demands for money or services by third parties as a result of any alleged incident) should be reported / provided immediately to Risk Management.  

 - If you are served with a lawsuit related to the College or to work performed at or on behalf of the College, any such document should immediately be submitted to Risk Management. 

 - If a police report is provided or obtained related to any incident or claim, it should be immediately forwarded to Director of Public Safety.

 - Risk Management should be notified of any property loss or potential loss as soon as possible, preferably before any cleanup activities have begun. 

 - In the case of significant property loss or damage, it is important that Risk Management be notified as soon as possible so that an insurance company claims representative can be contacted to tour the site. 

Responsibility:  Manager, Purchasing & Risk Management
References:  WORKERS’ COMPENSATION procedure adopted August 11, 2014; BODILY INJURY/PROPERTY DAMAGE/THEFT procedure adopted February 15, 2003 
 

 

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