By Mary E. Whisenand, AU, RPLU
Implementing Insurance Requirements on Campus
A key element of enterprise risk management is identifying what financial risks can be easily transferred through implementing insurance requirements. Third parties including vendors, students, and visitors can introduce unexpected financial losses that can be mitigated by implementing insurance requirements.
Common Risk Transfer Policies.
Requiring third parties that create potential financial losses to secure insurance coverage to pay for claims or damages they cause is a practical approach used by private sector companies. While contracts can provide some institutional comfort, if the counter party is incapable of paying for the losses that they cause, then the school will likely suffer a loss.
Within higher education, the risks are often distributed across departments, and what is a normal best practice in business may not be easily implemented on campus. As a result, leaders are smart to evaluate how to implement insurance requirements by the source of risk.
Vendors can create multiple risks often covered under a general liability policy, but not all risks are covered. Schools are smart to also evaluate additional risks caused by vendors, including:
Cyber Risk - vendors who have access to institutional data, student and employee data, or institutional intellectual property. Cyber insurance can protect institutional data against breach, ransom, and other threats caused by vendors.
Sexual Abuse & Molestation - vendors who interact with students or minors on campus.
There are approximately 1,840 fires on college campuses every year based on Clery Act Reports data since 2009.
Students can pose risks that were uncommon just a decade ago.