Managing Risk – Insurance and Contracts
Insurance Claims and Administration
Not all risk needs to be accepted. Through effective management, risk can be controlled and minimized. Effective risk management seeks:
- to contain the financial impact of losses upon the University within limits which are determined in advance to be acceptable;
- to minimize the disruption associated with any claim through efficient and effective administrative response.
Risk management is the process of identifying and analyzing possible exposure to loss and reducing loss potential thereby protecting the University’s physical and financial assets.
The Risk Management and Insurance Department strives to be a consultative expert resource to the University community in advising about insurance, claims and paralegal issues related to risk management and loss avoidance.
Specifically, it is available to:
- provide information about risk management,
- answer questions about insurance policies and coverage,
- answer questions about legal liability,
- handle insurance claims,
- offer paralegal advice concerning agreements of various types, contractual language or clauses and related legal issues.
In addition, this department handles negotiations with insurers for purchase of all of the University’s commercial policies.
For more information, refer to the Risk Management and Insurance Department website.
Risk management is necessary because losses will occur. However, faculty and staff can play an important role in significantly reducing the potential for loss:
- Ensure that access to premises is controlled where appropriate,
- Minimize risk of fire and injury with good housekeeping and safety practices.
- Maintain the security of capital assets, particularly moveable equipment which is subject to theft:
- Control supply inventories:
- restrict access,
- keep adequate records,
- minimize obsolescence by avoiding overstocking and using appropriate distribution methods.
- Minimize cash on hand and exercise appropriate cash security measures.
- See GTFM section on Cash, Other Receipts and Banking.
- Ensure business contracts receive appropriate financial and risk reviews. See Risk Management and Insurance Department – Contracts.
- provide services on credit only to credit-worthy customers
- take appropriate action to collect accounts receivable.
- See GTFM section on External Revenues/Expense Recoveries .
- Exercise due care in carrying out responsibilities.
Insurance and Claims Administration
The University carries a full range of blanket policies covering all of its premises and operations against normal insurable risks. These are centrally funded except for some specialized policies which are purchased on a user pay basis. The principal coverage and related descriptions can be found on the Risk Management and Insurance Department web site (Insurance Coverage).
The Risk Management and Insurance Department administers all claims under the University’s policies and through its self-insurance program and negotiates claims settlement with its various insurers. Guidelines for reporting a claim can be found on the Risk Management and Insurance Department web site (Claims).
Indemnification/Hold Harmless Clauses
Contract indemnity clauses occur in a variety of forms and are generally part of any written agreement. Many different labels are used to describe these risk allocation clauses, the most common of which are: Indemnification, Hold (or Save) Harmless, Release, Waiver, Liability and Exculpatory .
Contract indemnity clauses are a business tool designed to shift and allocate risk between contracting parties based on economic considerations and without regard to either party’s relative degree of fault.
We have an internal process to obtain indemnification for the University and to avoid unreasonable indemnification of other parties as necessary. This aspect is managed by the Risk Management and Insurance Department.
Types of Contracts and Agreements
Some examples of situations where indemnification requirements are common include:
- student work experience programs
- clinical practicum
- hospital agreements
- contract research
- technology transfer
- licensing intellectual property
- real estate purchasing
- construction contracts
- equipment leases/rentals
The above examples are representative of agreements covering either the purchase or sale of goods and services in various forms.
Depending on the relationship of the parties, the relative benefit flowing to each, authorship of the agreement itself, relative bargaining position of the parties, etc., the relevant business terms of these agreements can vary widely.
Often, there are significant insurance implications such as coverage during shipment of goods from/to a vendor’s premises or handling of insurance when a vehicle is rented in the course of some business activity.
In all questionable cases, contact the Director, Risk Management and Insurance for advice at 416-978-6478.
Refer to the Policy on Approval and Execution of Contracts and Documents for details on:
- Approval of Contracts and Documents
- Execution of Contracts and Other Agreements Not in the Normal Course of Business
- Approval and Execution of Specific Classes of Contracts and Documents in the Normal Course of Business
- Corporate Seal
Last Revision April 2007