Office reorganizes to reduce campus risk

When the cost of a university’s insurance premiums goes up $2.4 million in one year, a change of business is generally in order.

That’s what is happening at the UC Davis risk management office, which is rethinking the way it helps the campus evaluate the risks and rewards of research and other academic programs in part after seeing the campus’s insurance premiums rise from $4.1 million in 2000-2001 to $6.5 million in 2001-2002.

The economic downturn and the accompanying hardening of the insurance market is to blame, said Deborah Luthi, campus director of risk management services. And Insurance costs further skyrocketed after the Sept. 11 terrorist attacks. The campus could face such possible ramifications as denial or limitations of coverage, increased deductibles and higher premium costs, she said.

So Luthi’s office – at one time centered on handling insurance claims – is now concentrating on helping departments anticipate where they might incur claims or face lawsuits in today’s increasingly litigious society. In the past few months, the office has helped develop guidelines for the Hypermini electric vehicle study, student and faculty travel, and the content of university Web sites, for example.

The new focus has the office conducting "risk awareness" classes and sitting down with departments to help employees discern both the hazards and rewards for the university before they take on projects. The office has also moved from Human Resources to a more central post in the Office of Administration.

"Risk management isn’t just the responsibility of Risk Management," Luthi said. "It’s everyone’s responsibility."

Though recent economic insecurities have heightened the need for UC Davis to minimize its risks, changes in the office have been in the works for a few years.

A 1997 decision by the UC Office of the President’s Budget Office upped the ante for each campus by changing the way payments for liability claims and settlements are handled, said UC Davis Director of Risk Management Services Deborah Luthi. Now, rather than having the UC Office of the President fund projected liability costs for the system, each campus directly pays for the programs providing coverage.

"We have more accountability now," said Stan Nosek, associate vice chancellor of business services and supervisor of the risk management office.

The challenges the UC Davis risk management office has faced in recent years and months are not unique. A Nov. 16 story in the Chronicle of Higher Education covered the evolving responsibilities of college risk managers nationwide.

That was something Nosek and Janet Hamilton, vice chancellor of administration, had in mind when they decided to move Risk Management last July.

Work with Human Resources to decrease employee claims in areas such as gender, sex and age discrimination has allowed the office to focus on reducing additional liability and property risks in other departments, Nosek said.

Program managers across campus seem to be receptive to Risk Management’s efforts.

"The office has moved from being reactive in the past to being proactive," said Rosemarie Kraft, the Graduate Division’s associate dean for student affairs.

She has worked with Luthi to ensure academic policies the Graduate Division posts on its Web site are accurate. When terms contradict or are not as complete as the information offered by a student’s department, the discrepancies not only are confusing but can also lead to a lawsuit, Kraft said.

Balancing academic and liability concerns is an important aspect of the work of a university risk manager, Luthi said.

When the Institute of Transportation Studies launched a study to gauge public interest in using electric vehicles around town, Risk Management convinced the institute that the cars needed to be driven by university employees on the job. But Joe Krovoza, institute development director, persuaded the office to also allow student employees to drive the Hypermini cars during off-hours. This would heighten Davis residents’ exposure to the vehicles.

"There were things we needed to do to produce valuable research," Krovoza said. "And Risk Management needed to make sure the university wasn’t incurring an ungodly amount of liability."

At Bodega Bay Marine Laboratory, director Susan Williams and her staff are helping Risk Management develop a campus boating safety policy in the wake of the 2000 accident in the Sea of Cortez that killed a UC Davis professor, a researcher and three Japanese scientists.

The campus has also decided to offer travel accident coverage for university groups who face injury, death or even legal problems or lost luggage while working away from UC Davis, Luthi said.

"As the university’s programs expand out globally, the risks are different," she said. "We need to identify those risks and proactively respond to them."

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Amy Agronis, Dateline, (530) 752-1932,

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