THE UNIVERSITY OF MEMPHIS OPERATING PROCEDURE
SUBJECT: Insurance - Property, Liability and Other
PROCEDURE NO.: 2D:01:06A DATE: July 1, 1994
SUPERSEDES PROCEDURE NO.: 2D:01:06A DATED: July 1, 1992
A. General Introduction
1. Insurance coverage for buildings and their contents,
builder's risk, boiler insurance, surety, travel and
accident, and liability are included in this procedure.
Administration of this program is primarily the
responsibility of Physical Plant and Planning, the
Department of Public Safety and the Accounting Office.
This procedure does not include medical and hospitalization
insurance on individual employees or students.
2. The University insurance program functions within the
guidelines and procedures of the "State of Tennessee Risk
Management Manual" issued by the Department of Finance and
Administration. All insurance matters, i.e. purchases,
claims, correspondence, etc., must be routed through the
Assistant to the Director of Finance and the Tennessee
Board of Regents to the appropriate State official.
3. Any insurance questions or problems which are not included
in this procedure should be discussed with the Assistant to
the Director of Finance in the Office of the Director of
Finance.
B. Request for Purchase of Insurance
To obtain insurance in special situations not normally covered
(see Section D), the following steps should be taken:
1. Preferably ninety days before the coverage is needed,
submit to the Assistant to the Director of Finance a
memorandum describing the items to be covered, the location
of the items (address if other than The University of Memphis),
the period of time coverage is needed, and the amount of the
coverage.
2. The Assistant to the Director of Finance prepares a request
to the Tennessee Board of Regents. As soon as the permission
is obtained, the request for special coverage is forwarded to
Purchasing for processing.
3. The department requesting the coverage is charged for the
cost of the coverage.
4. The department acquiring special coverage is responsible
for submitting the original policy to the Assistant to the
Director of Finance for safekeeping.
5. Insurance purchases required by the terms of a grant
(ledger 5, Restricted Funds) must follow the above
procedures. The Office of Sponsored Programs will provide
written notice to the Director of Purchasing when the
terms and conditions of a grant requiring special insurance
coverage is being accepted by the University. The Director
of Purchasing will prepare the purchase requisition in
cooperation with the grant's project director, specifying
the type and length of coverage needed.
6. Insurance purchases with Agency Funds (ledger 8) do not
require prior TBR approval since the University will not be
a named insured party on the policy. However, the
department purchasing such policies is required to sign a
disclaimer stating that the University is not included as
a named insured party.
7. All claims filed against special policies should be routed
through the Assistant to the Director of Finance.
C. Reporting Losses or Damages
1. The department head or the responsible official is to
notify the Department of Public Safety of all losses,
theft, or damages to property, regardless of dollar value
of the property (see University Operating Procedures No.
2D:01:01H, Inventory and Control Program for University-
Owned Equipment, and 2D:01:05A, Reimbursement and
Responsibility for the Loss or Damage of University
Property Due to Negligence, and 2D:06:03A, Lost or Stolen
University Property.)
2. Uninsured losses including deductible amounts must be
provided from the departmental budgets if repairs or
replacements are required.
D. Insurance Coverage Maintained
1. All buildings, their contents, and selected improvements
other than buildings are insured through the State of
Tennessee. Buildings under construction are covered by
"builder's risk" riders. Separate boiler insurance is in
force to cover damage resulting from accidents to boilers
owned and operated by the University. This coverage
includes a $5,000 per loss deductible. Insurance on
buildings leased to the University should be provided by
the lessor.
Equipment, furnishings, and other contents are covered by
the State policy with a $5,000 per loss deductible.
Coverage is determined by the University equipment
inventory plus an additional amount estimated sufficient
to cover supplies (such as papers, books, carpets, drap-
eries, glass laboratory items, and other "non-equipment"
items). The department head or any other official having
knowledge of the receipt of gifts or of any other occur-
rence requiring a change to insurance coverage should
promptly notify the Assistant to the Director of Finance.
2. Personal Property Not Owned by the University
a. Personal property not owned by the University is not
automatically covered by the State insurance program.
Personal property in the University's custody and for
which it is responsible may be included if specific
notice is provided. To include property on loan, being
rented, etc., under regular coverage, provide informa-
tion to the Assistant to the Director of Finance.
The information provided must include a statement of
value with each item identified separately and signed
by both the property owner and a University official,
a statement of the time period for which insurance
coverage is needed, and a statement indicating where
the property will be located while in the University's
custody. This coverage is subject to the same $5,000
per loss deductible as the regular insurance. The cost
of this coverage is very small, and departments will
usually not be charged.
b. If coverage as specified in D.2.a. is not considered
adequate, the property owner should be encouraged to
secure his own coverage and include the cost in his
exhibition or rental fee.
c. Personal property of a faculty or staff member is not
insurable by the University.
d. The University may be liable for the negligent care,
custody or control of personal property. Any claim for
such negligence must be filed with the Tennessee Claims
Commission (see Section D.5.)
3. A surety bond covers all employees for $100,000 with a
$5,000 deductible for each loss. All personnel are covered
by this policy, including part-time or temporary employees
and student employees, during "periods of employment".
4. Workmen's Compensation type benefits are provided through
the Tennessee Claims Commission. Assistance may be secured
from the Department of Public Safety for filing claims.
5. Third Party Liability. All claims against the University
come under the jurisdiction of the Tennessee Claims
Commission. For information on filing a claim, contact the
Assistant to the President - Legal. Under special circum-
stances liability insurance to cover others may be obtained
if required by contractual agreements and appropriate approval
is secured.
6. Other Liability Coverage. The University does not provide
automobile liabilities, the Tennessee Claims Commission has
jurisdiction to award damages for University employees'
negligent operation of a vehicle. University employees who
regularly make use of State-owned vehicles should contact
their own insurance agents, if coverage is desired, to obtain
a rider for liability coverage insuring them personally when
operating a State vehicle (the University does not reimburse
employees for this insurance).
Professional liablility insurance, such as malpractice insur-
ance, with rare exception, will not be purchased by the State.
7. Medical and Travel and Accident Insurance. This insurance can
be obtained with proper authorization for such items as inter-
collegiate athletics, special events such as Junior Olympics,
basketball clinics, high school events, swim meets, etc. (See
Section B.)
8. Other Insurance. Requests for any other type of insurance not
specifically included in this procedure will be considered
individually, as described in Section B.