North Carolina Agricultural and Technical State University
Insurance and Risk Management Procedures
The Environmental Health and Safety Department
(Formerly the ARISA Department)
Introduction
This document establishes the procedures to be used by University staff, faculty and students in selecting the various types of insurance that may be needed and procured to protect employees and students, as well as University and personal property. This document also contains property insurance procedures, student accident insurance coverage, tort claim procedures, and a glossary that defines insurance types, and common terms used in understanding insurance transactions.
The University’s Administration recognizes its stewardship role over the institution’s assets, both human and property. The Administration interprets its responsibility in this area as requiring the highest possible concern for the safety of its students, employees, and the public, combined with the recognition that maximum protection will be accorded to all University property to prevent financial loss.
In order to successfully implement the educational and operational goals of this University, as well as for humanitarian, social, legal and financial reasons, the University recognizes that it must accept the responsibility to protect the health and safety of all members of the University community including guests and other members of the public, from hazards on the campus. In addition, the University must seek to protect and preserve the physical plant and other assets against losses arising out of any occurrence.
With full appreciation of the University’s diverse activities in its academic and non academic programs, including student industries, farming operations, business activities, and utility departments, that expose the University, its people and other resources to many risks that may or may not be generally associated with a campus environment, the Vice Chancellor of Business and Finance hereby establishes a risk management program with the procedures needed to manage these risks to the extent possible.
Managing the University’s risk of loss in terms of both human and financial resources is the responsibility of Director of EHS. The Director shall identify risks and then, after consulting with the Vice Chancellor of Business and Finance, recommend means of eliminating, abating, transferring, or retaining these risks. When the University cannot eliminate or economically retain a risk of loss, responsibility is transferred by purchase of insurance. The EHS Director, in consultation with the Vice Chancellor of Business and Finance, will determine the form and sufficiency of limits of liability for casualty protection for the University. The Vice Chancellor of Business and Finance shall inform the Chancellor of the actions taken.
The University’s risk management program recognizes its ability to budget for and thereby retain limited and predictable risks of financial loss. However, it is not the University’s intent to attempt to insure such foreseeable and bearable expenses if alternatives can be achieved with regards to sound business practice.
For example, the University will remain alert to all opportunities for cooperative action with other institutions that promote mutual benefit in handling risks that are not readily insured or safety retained. Any such cooperative activity shall be explored by the Director of EHS and reported to the Vice Chancellor for Business and Finance.
All North Carolina state agencies have an “Agent of Record” designated by the state Department of Insurance to manage the insurance needs for state agencies. This agent is the North Carolina Association of Insurance Agents. The authority for this agency to procure insurance for the State is found in Title 11 of the North Carolina Administrative Code, Chapter 7.
The EHS Department is the official University Department designated to work with the Agent of Record and the Department of Insurance in securing insurance coverage for all University functions and needs. Requests for coverage and information regarding coverage will be submitted to EHS for processing under the University’s insurance requirements. Request for coverage must be timely submitted in the format set forth by the EHS Department in order to be processed. All requests for coverage must be submitted electronically on the form found at the end of this document.
Notwithstanding the self-insurance of the State of North Carolina, the University will purchase insurance with full consideration of the services offered by the insurer, its reliability and financial stability, and the price of the insurance coverage as competitively determined. The University does not recognize any other obligation to be satisfied by the selection of any particular insurance underwriters, brokers, or agents.
All renewals and initial request for coverage must be initiated through the EHS office! All departments required to maintain or procure insurance coverage for various insurable interest of the University must act in a proactive manner to maintain coverage. This requires prompt adherence to renewal notices and strict follow through on providing needed or requested information for the procurement of coverage.
The Vice Chancellor of Business and Finance shall determine the deductible amount on any insurance, on the recommendation of the Director of EHS and in recognition of insurance market conditions.
Property and Equipment Insurance
Each year, A&T State University receives a list from the Department of Insurance designating the property interests we insured the previous year. This list includes both the buildings and the contents within the buildings purchased by the State. This insurance coverage always expires on February 1st and requires an annual review. The list of property interests is provided to Property Management where the Property Officer reviews it for accuracy.
Subsequently the list will be forwarded to the appropriate department for verification of the assets and the property coverage amount. A spreadsheet is generated to show a breakdown of charges by department. This breakdown of individual charges should add up to be the total amount of the premium. This spreadsheet is given to the Business and Finance Reporting section to complete the journal entries, which then reimburses the EHS account from the various departments’ budgets that were charged for the insurance premiums.
ADDING VALUE TO AN EXISTING BUILDING OR A NEW BUILDING TO THE UNIVERSITY INSURANCE POLICY
New buildings and their State-owned contents only are added to the list of property interests by completing NC Department of Administration (DOA) or Department of Insurance (DOI) Risk Management Property Reporting Forms. The University Engineer’s Office is responsible for notifying the EHS office when a new building is ready for occupancy after it has been released by the contractor. The Property Officer, working in conjunction with the EHS Director, will ensure that all new buildings and their State-owned contents are added to the property list during the annual review, as well as updating the value of existing, renovated buildings.
When a building has been restored to its original state and no value has been added, the listing on the insurance policy remains the same. However, when the renovation adds value with more space, seating, etc., then the Property Office shall complete a DOA or DOI Reporting Form and forward it to the EHS office, who in turn, forwards it to the DOI.
Property Management also updates the State-owned content value of each building. When purchased by the state, equipment such as copiers, faxes, general computers, etc., are covered under the State’s property insurance. Any equipment purchased by other means (Grants, etc.), is not covered by the State’s property insurance and must be insured through other means.
Building contents not covered by State property insurance can be covered under an “All Risk Policy”. For example, the Computer Center covers their mainframe computers, Agriculture covers their satellite system, Researchers cover certain grant purchased items, and WNAA covers their radio equipment under this type of policy. Quotes for this type of coverage will be issued for specific property items, and will be secured by the Agent of Record for the University through the EHS office. It is important to remember that; faculty and staff are not allowed to enter into dialogue for quotes or insurance with the insurance company or the Agent of Record (NCAIA). This responsibility is delegated to the EHS office only.
This policy premium for this coverage is charged to the requestor’s departmental budget. University members interested in considering this type of coverage should contact the Director of EHS for assistance.
Student Insurance
North Carolina Agricultural and Technical State University require all students who reside in our Resident Halls to carry on campus student accident insurance. This coverage is paid for by a mandatory fee collected as part of the tuition and fees, and provides a maximum coverage of $2,500 per student for medical expenses associated with an accident. If students do not have other coverage and feel that they need sickness benefits and additional injury benefits, there is an optional sickness and injury insurance plan available. The Sebastian Student Health Center provides this information and administers all aspects of the basic accident insurance program and addresses the concerns when a student has an accident or needs medical attention.
In addition, students may purchase additional accidental coverage for an extra charge or be covered under a parental or guardian insurance plan. An on-campus student with a family can also elect the non-mandatory coverage for their family. This is at an additional cost to the student or their parent.
Off campus students are not required to carry this coverage, but can elect to buy the non-mandatory coverage. An off-campus student with a family can elect to take the non-mandatory insurance and add their family for an additional cost. This insurance coverage applies only for the period the student is enrolled at the University.
At the beginning of each academic session the Student Housing Office prepares a roster of enrolled students. This roster is sent to the EHS office, which forwards the roster to the NCAIA. NCAIA returns an invoice for insurance coverage to EHS, who then passes the invoice to the Housing Office. The Housing Office prepares the payment, sends it to EHS, and then EHS transfers the check to the NCAIA.
It is critical that the Housing Office prepare the student roster in as timely a manner as possible to ensure that the mandated coverage is provided.
The EHS Department will act as the University representative with the NCAIA and the Agent of Record for the student coverage. Generally there is no direct contact with the insurance carrier. Also, EHS will, in concert with the Housing Office, ensure that the roster has been verified for the correct policy number and the number of students represented in the policy.
Student Internship Insurance Program
The purpose for this coverage is to provide Commercial General Liability and Professional Liability coverage for students who work with agencies in the private sector as part of their educational experiences. It also contains an Accidental Death and Dismemberment endorsement. The premium for this coverage is normally paid by the students participating in the program. Program Administrators who monitor these programs should consider the nature of the student activities and include this coverage as a part of the prerequisites for the course. The Chair for the department administrating the program should contact this office for a copy of the policy, in order to know what is excluded and what endorsements are in effect. The parameters of coverage and the students’ actions should be explained to each student in the program to underscore what actions and activities are covered. Premiums and rosters for students should be forwarded to this office for processing before the student begins the internship. Claims made before the policy requirements have been met, may become the responsibility of the student and or their academic advisor.
Special Events Coverage
From time to time, the University will host or allow special events to be held on campus. Conversely, the University will choose to become a part of an event off campus, when either of these events occurs Special Events coverage may become necessary. When the event requires coverage not in effect or available through the Department of Insurance, the organizer should contact EHS for an application to secure the coverage from an outside source. Examples of the types of events using this coverage are; festivals, concerts, parades, motor sports and other one-time occasions. The list of coverage’s available include; General Liability, Property, Inland Marine, Auto, Workers Compensation, Crime, Liquor, Excess/Umbrella and many more.
Study Abroad and International Programs
This coverage is available to students that opt to study abroad. It covers both undergraduates and graduate students taking credit hours or engaged in educational activities. Special extensions are offered to faculty and staff engaged in university activities and may cover spouses and dependents. There are soft waivers (if a student has comparable insurance coverage or if the country they are traveling provides complete coverage) the student can opt out of the requirement to purchase the coverage. The preferred method of the university is to require the coverage as primary and supplement it with any other coverage the student may wish to use. The Director of the Study Abroad program is very familiar with the insurance program requirements and will guide any interested applicant through the process.
Outside Vendors or Contractors Working on Campus
As a pre-requisite for working on campus, all outside vendors or contractors are required to submit a Certificate of Insurance to indicate the types, coverage periods and amounts of insurance they have (or will have) prior to conducting business on campus. Any persons working on campus for any outside vendor must report any and all accidents or injuries to their employer. A courtesy notification should also be given to the EHS office.
Accident Tort Claim Report Procedures
1. Individuals who believe they have a claim against the University shall complete an accident report (this is their recording of the events which happened in their own words). Also, the report documents their recall of actions taken step-by-step.
2. This report is then submitted to the EHS office for further investigation with all other relevant and supporting documentation (police reports, etc.). EHS will normally conduct a separate investigation, visit the accident site, take pictures and record other evidence at the site.
3. Based upon their findings and review of all available evidence, the EHS investigator will complete a report with an opinion as to the contributory causes.
4. After reviewing the internal EHS investigation and other pertinent documents and evidence, etc., the ARISA Director will forward the Department’s findings to the University Legal Counsel, along with an opinion as to whether any State employee or agent, procedure, equipment, etc., was a contributing cause to the incident. The Claim Report form, all pictures and other supporting data shall be included.
5. Based on the evidence presented, the Legal Counsel will consult with the EHS Director regarding the accident.
6. University Legal Counsel may send the documentation and report, along with their opinion, to the State Attorney General's Office. The claimant will receive further instruction from the State Attorney’s office regarding any further adjudication of their claim. Any correspondence from this point must be made with the State Attorney General’s office and not the University.
This document maybe updated and revised from time to time to reflect changes in the insurance market or the Universities polices regarding insurance. Please note the attached Request for Insurance document found at the end of this manual, it is the preferred source for request for coverage at North Carolina A & T State University.
If you have any questions regarding the contents of this document, please feel free to contact the EHS office at; 334-7992 or 334-7032.
A policy of insurance against damage to property is written to insure against “named perils,” i.e., the various hazards against which the policy insures are listed. However, polices may be issued in certain cases to insure against “all risks of loss or damage” and are then termed “all risk” polices. The term “all risk” may appear confusing because all policies exclude insurance against certain hazards.
Any kind of insurance pertaining to the ownership and operation of automobiles.
A form of liability insurance (see that definition) which is specifically designed to indemnify for loss incurred through legal liability for bodily injury and damage to property of others caused by accident arising out of ownership or operation of an automobile.
Insurance covering loss or damage to the University’s automobile. (Material damage insurance)
A memorandum of an agreement to insure issued to record the transaction pending the writing of the policy or coverage. A policy to “close out” will be issued to replace it shortly.
A blanket policy insuring against employee dishonesty, losses inside and outside the premises, money orders and counterfeit currency, and depositor’s forgery. Policy covers money, securities, and the other property with a single limit of insurance applying to all coverage’s, none of which may be eliminated.
When a single amount of insurance covers several items, the policy is said to be written “blanket.” For example, one may write one amount of insurance to cover two buildings, or one building and its contents. Such polices usually require the fulfillment of certain restrictions which may not be required in “specific” or “itemized” policies such as the use of a 100% coinsurance clause. “Blanket rates” are rates which apply to “blanket” policies.
Insurance against loss arising from the operation of boilers and machinery. May cover loss suffered by the boilers and machinery itself, or include damage done to other property and business interruption losses. Machinery breakdown insurance.
When one has a calamity of some kind which prevents the normal carrying on of business, he loses profits and has certain continuing expenses which may not be avoided. The insurance of this loss against any hazard is call “business interruption” insurance, or often “use and occupancy.”
A certificate of insurance is in the usual sense of the word a copy of a policy. When a policy is issued covering a piece of property which is mortgaged with a “mortgagee clause” attached, as is often the case with properties such as dwelling houses, the mortgagee usually insists that he be given the original policy. In such cases a certificate is issued by the agent or the company, which is given to the owner for his records. Also the document which gives the specific details of property insured by “master” or “open” policies. Ocean marine cargo insurance usually handled by use of certificates referring to an open master policy.
The amount which a policyholder believes he has coming from an insurance company as the result of some happening insured against. After its amount has been determined, it becomes a “loss.” In practice, the terms “claim” and “loss” are synonymous.
A clause contained in some fire and burglary policies, requiring the insured to carry insurance equal to a stated percentage of the value of the insured property if he is to collect his partial losses in full up to the limits of the policy.
Either a vehicle or a ship collides when it strikes another object or another vehicle or ship. Collision insurance insures against loss so caused.
Insures an employer against loss through dishonest acts committed by his employees, and covers all employees in the regular service of the employer during the term of the bond. A commercial blanket bond is issued for a fixed amount, which is the maximum sum payable for any one embezzlement, whether one or more employees in involved. See “Blanket Position Bond.”
This term refers to the liability a contractor might incur from improperly performed work after he has completed a job. At one time regarded as part of products liability, but now more properly regarded as a separate coverage.
An item of coverage in an automobile physical damage policy insuring against loss or damage resulting from numerous miscellaneous causes such as fire, theft, windstorm, flood, vandalism, etc., but normally not including loss by collision or upset.
A policy particularly suited to a manufacturer, contractor or large wholesaler or retailer providing broad coverage for claims made against him for bodily injury or damage to property of others for which he may become liable and which arise out of his entire business operation. Automobile liability coverage’s may be included in this policy.
A liability which may be incurred by an insured as a result of negligence on the part of independent persons engaged by him to perform work. The most common example is the contingent liability of a principal contractor, which may result from construction operations undertaken by his subcontractors. In property damage insurance, the possibility of financial loss to a policyholder resulting from damage or loss to the property of another, e.g., a supplier or a customer.
An inland marine form to insure the equipment, tools and materials of a contractor.
Liability as set forth by agreements between people as distinguished from liability imposed by law (legal liability).
Deductible Clause – Some policies are written to pay only after the policyholder has himself suffered an agreed amount of loss. The amount which he must lose first is “deducted” from the total of the damage to determine the amount the company must pay and thus becomes the “deductible.”
The difference between the value new and a reduced value at any subsequent time.
Protects officers and directors of a corporation against damages from claims resulting from negligent or wrongful acts in the course of their duties. Also covers the corporation for expenses incurred in defending lawsuits arising from alleged wrongful acts of officers or directors. These policies always require the insured to retain part of the risk uninsured.
A provision in an automobile policy to protect the policyholder when he is driving cars other than the one described in the policy.
When a premium is paid in advance for a certain time, the company is said to “earn” the premium as the time advances. For example, a policy written for three years and paid for in advance would be one-third “earned” at the end of the first year of its life.
A type of insurance which will step in to take the place of insurance that has not been affected due to a mistake or forgetfulness. Issued to concerns such as mortgage concerns or others engaged in the routine insurance of many properties.
An excess policy is one which does not pay until the loss exceeds an agreed amount. This amount may or may not be insured elsewhere. Excess policies are not subject to the basic principle of contribution with non-excess policies, although they may contribute or share the loss with other excess policies.
Something not covered and so set forth in the wording of a policy.
Making rates based on what the past history of the insured risk has been.
A policy “expires” when the time for which it was written has run out. “Expiration” is the date on which it expires.
The danger of loss (particularly by fire) arising from what happens to another risk close by. Also the sum total of values which, if damaged or destroyed, would cause loss under a policy, i.e., the value of everything a policy insures. Also used as a measure of the rating unites or premium basis of a risk, e.g., payroll exposure or an exposure of a number of automobiles.
A bond which makes good if an employee steals or embezzles or otherwise robs his employer.
While a fire is a fire in ordinary language, by insurance definition there must be accompanying flame to make it so quality. For example, a fire policy is not liable for losses caused by scorches by cigarettes, unless a flame is actually produced at the same time.
Covers losses from fire and lightning and also the resultant damage caused by smoke and water. Usually supplemented by extended coverage.
Refers to the construction of a building built of steel and concrete or other noncombustible materials. The proper term for “fire-proof.”
A policy which covers property at any location, i.e., the protection “floats around” with the value.
Overflow of water from its natural boundaries. More specifically defined by the National Flood Act of 1968 as “general and temporary condition of partial or complete inundation of normally dry land areas from (1) the overflow of inland or tidal waters or (2) the unusual and rapid accumulation or runoff of surface waters from any source.”
In insurance language, it usually means the contents of a building excepting merchandise for sale or in the course of manufacture (stock) and excepting machinery. Fixtures are the pieces “fixed,” that is, attached to the building.
The right to occupy a building set forth in a lease may be valuable and may be subject to loss if certain
A tenant who has signed a lease.
A person who owns property and rents it to another under the terms of a contract called the “lease.”
A form of insurance that protects from liability imposed by law for bodily or other personal injury or damage to property; legal liability normally results from negligent acts or omissions. (Definition added by NACUBO)
In insurance it means the amount their insurer is required to pay because of a happening against which it has insured. A happening that causes the company to pay. Also refers to the overall financial result of some operation, as opposed to “profit.”
A condition in a policy whereby the company is directed by the policyholder to pay any loss that may be due to some other person designated in the policy. Usually the payment is made by check or draft payable to the insured and the designated payee both.
The improper professional actions or failure to exercise proper professional skills by a person practicing a profession, such as a physician or dentist.
Insurance of liability arising from business operations including ownership and maintenance of premises. Applicable mainly to persons or corporations engaged in manufacturing, construction, and installation work. Policies always exclude automobile liability.
One of the major divisions of insurance (life, fire, casualty, marine, fidelity and surety). Has to do primarily with property in transit. If by sea, called “ocean” marine. If otherwise, “inland” marine.
A clause whereby the company agrees that the amount it will pay in the event of loss shall be the value of the destroyed merchandise “on the market,” i.e., what can be realized by selling it. Obviously, this thereby includes the seller’s profit. Therefore, the clause is used with caution to avoid the creation of a moral hazard.
MEDICAL PAYMENTS INSURANCE
An agreement to pay the cost of medical care to an injured party irrespective of whether or not the policyholder is liable to do series. Written in conjunction with general liability policies. A similar coverage, automobile medical payments, is available in automobile liability policies.
MORTGAGEE CLAUSE
A mortgagee lends money on the security of the value of the property mortgaged. If the property burns, the mortgagee could find himself without collateral. He insists on a clause in the policy which makes any loss incurred payable to him and which safeguards his rights in other ways. Such a clause is a “mortgagee clause.”
MYSTERIOUS DIAPPEARANCE
The disappearance of insured property in an unexplained manner. Mysterious disappearance is now an insured peril under broad form personal theft policy. Previously there were disputes under theft policies as to whether property mysteriously lost had or had not been stolen. To avoid contention, insurers stated in such policies that mysterious disappearance was presumed to be due to theft. Mere disappearance of property such as an article dropped from a boat is not covered since the disappearance is not mysterious.
NAMED INSURED
The person designated in the policy as the insured as opposed to someone who may have an interest in a policy but not be named.
NATIONAL FLOOD INSURANCE ACT OF 1968
An act establishing a basis for flood insurance as Flood Insurers Association.”
NATIONAL FLOOD INSURERS ASSOCIATION
A voluntary pool of property insurers formed to provide flood insurance for dwellings in specified areas in collaboration with the U.S. Department of Housing and Urban Development (HUD). This joint venture produces a market for flood coverage hitherto almost nonexistent. The association was formed in 1968 with headquarters in New York.
NEGLIGENCE
One who does not use the care to be expected from reasonably prudent procedure may be considered to be negligent. He may be so as the result of doing something or failing to do something. For a person to be responsible, or liable, for the consequence of his acts, it is first necessary to prove his negligence.
NO-FAULT AUTO INSURANCE
“No-fault” is a term coined to describe a system for improving the compensatory process for automobile accident victims by eliminating costly and lengthy litigation. The concept of “no-fault” was developed in recent years by lawyers Keeton and O’Connell, but a variety of so-called “no-fault” plans substantially lawsuits and introduced into state legislatures has rendered the term almost meaningless.
NON-OWNERSHIP AUTOMOBILE LIABILITY
Insurance against the liability incurred while driving an automobile not owned or hired by the policyholder.
NOON CLAUSE
Some fire polices start and end at noon, and so state. A noon clause may be used to make clear what kind of time is meant, i.e., standard time at place of risk, or Eastern Standard Time, or some such provision.
OBLIGEE
The person or persons protected by a bond.
OCCURRENCE
A happening or event. A basis for coverage in liability policies much broader than the accident basis, which requires the injury or damage to be due to a specific accident.
O.L. &T.
Owners’, landlords’, and tenants’ liability, which arises from the ownership, operation or maintenance of premises.
OWNERS AND CONTRACTORS PROTECTIVE LIABILITY INSURANCE
Insures the legal liability of contractors and other persons for the negligent acts of independent contractors engaged by them and also, in some cases, for their won negligent supervision of the work performed.
PACKAGE POLICY
A package policy is a combination of the coverage of two or more separate policies in one contract with one premium. A move toward economy and efficiency by giving the policyholder one document instead of several.
PARTIAL LOSS
Loss involving less than all of the values insured or calling on the policy to pay less than its maximum amounts.
PAYROLL AUDIT
Some insurance, notably worker’s compensation, charges its premium on the basis of the policyholder’s payroll. The company sends out “payroll auditors” to determine the accuracy of the policyholder’s figures.
PERSONAL INJURY LIABILITY
Sometimes synonymous with bodily injury liability. More specifically, an additional coverage in a liability policy relating to other than bodily injury to the person and would include such actionable wrongs as false arrest or imprisonment, malicious prosecution, libel, slander, and invasion of privacy.
PERSONAL PROPERTY
Property other than “real” property. The latter is buildings and land, whereas personal property is all else. Chattels.
PERSONAL PROPERTY FLOATER (P.P.F.)
A broad form of inland marine policy issued to the owners of furniture and other household effects which protects against “all risk” with certain exclusions. Covers the insured property wherever it may be. With the advent of homeowner’s insurance, separate PPF’s are seldom written, since the coverage is included in homeowner’s “5” policies.
PLAINTIFF
One who brings a lawsuit against another? The “asker” in a lawsuit. The other party is the “defendant.”
PREFERRED RISK
A risk of a class considered to be particularly desirable.
PREMIUM
The amount of money an insurance company charges to provide the cover that the policy describes.
PRESSURE VESSEL
Something designed to contain gas or vapor (such as steam) under pressure. A steam boiler is an excellent example.
PRINCIPAL
In surety ship, the principal is the one whose honesty, fidelity, or ability to perform is guaranteed.
PRIVATE PASSENGER CAR
An automobile primarily operated by the owner for his personal use, as distinguished from commercial use, such as would be the case with a truck or taxicab.
PRODUCT LIABILITY
The liability a merchant or a manufacturer may incur as the result of some defect in the product he has sold or manufactured.
PROPERTY AND CASUALTY INSURANCE
Basically there is a broad insurance distinction between companies writing life and health insurance and those writing the “non-life” classes as fire, casualty, and surety, inland marine, etc. Numerous and varied descriptive titles have been employed to describe this “non-life” area of operation and although no one definition has yet been firmly established, the tendency is to adopt the generic title “property and casualty insurance.”
In 1965, the Commission on Insurance Terminology recommended the term “property and liability” and although this is now used in some quarters there is a feeling that the word “liability” is too restrictive to properly represent classes of casualty business such as burglary, glass, physical damage, boiler and machinery, etc.
PROPERTY DAMAGE LIABILITY INSURANCE
Covers the insured’s legal liability for negligent damage to property of others. A form of “third party” insurance.
PROPERTY INSURANCE
The insurance of real and personal property against physical loss or damage. A form of indemnity insurance not to be confused with property damage liability insurance (see that definition).
PUNITIVE DAMAGES
Damages awarded separately and in addition to the compensatory damages, usually on account of malicious or wanton misconduct, to serve as a punishment for the wrongdoer and, possibly, as a deterrent to others. Sometimes referred to as “exemplary damages.”
RATE
The price of $100 of insurance, usually for one year. Expressed in dollars and cents or in percent.
REAL PROPERTY
Land and buildings.
REINSTATEMENT
Some policies provide that the payment of a loss reduces the amount of insurance by the amount paid. When the amount of insurance is restored by endorsement or other agreement, the policy is said to have been reinstated. Most fire policies contain an automatic reinstatement clause.
REINSURANCE
The process whereby a company may share its risk with another paying to such sharing company a portion of the premium it receives. Done in many ways. Reinsurance contracts pay only the company which reinsures, not the policyholder.
RENEWAL CERTIFICATE
It is the practice in many cases to issue a short form certificate instead of writing a whole new policy to replace an expiring one. This form is the renewal certificate and contains merely references to the original policy rather than its complete terms.
RENTAL VALUE INSURANCE
Insurance which reimburses the owner of a building who occupies it himself for the cost of renting some other place if his own building be rendered unusable by some peril insured against.
RENT INSURANCE
If you own a building and rent it to another, a fire other insured happening may make it impossible to collect rent from your tenant until the building has been replaced or repaired. Insurance against such loss is “rent’ insurance, and is one of the “time element” covers.
REPLACEMENT
Most policies of insurance of property give the company the right to substitute other property of like kind and quality for insured property which has been damaged or destroyed. This is making a replacement.
REPLACEMENT INSURANCE
Insurance which pays the sound value of damages or destroyed property without deduction for depreciation.
RESERVE
A sum set aside to meet some future obligation. See “Loss Reserve.”
RISK
The chance of loss. Specifically, the possible loss or destruction of property or the possible incurring of a liability. Sometimes refers to the subject of an insurance contract when talking of a “good risk” or a “poor risk.”
SCHEDULED PROPERTY FLOATER
An inland marine form which is designed to insure various specific items with a specific amount of insurance on each. Any articles of unusual value may normally be written on such a form provided they are movable (so they may qualify as inland marine). Such forms usually insure against many hazards or often are written against “all risks.”
SELF-INSURANCE
A term used when it has been decided to assume one’s own risk through internal financing mechanisms rather than to purchase insurance.*
SELLING PRICE CLAUSE
A provision in a policy whereby it will pay the price for which the owner expected to sell his merchandise instead of what it would cost him to replace. Includes the merchant’s profit.
SHORT RATE CANCELLATION
When a policy is cancelled by the policyholder before it reaches its natural expiration, the company pays a return premium less than the proportionate or pro rata part that is still unearned. The policy is cancelled “short rate,” not “pro rata.”
SPECIFIC
Insurance that is “specific” as opposed to “blanket.” That is, it describes what is insured more definitely, e.g., a policy covering “building and contents” would be blanket whereas one covering a certain amount on the building and another amount on the contents would be “specific.”
SPRINKER LEAKAGE INSURANCE
Insurance against the damage done by water leaking from automatic sprinklers and similar fire prevention devices.
STATEMENT OF VALUES
When a risk is rated with a blanket rate, that is when a single rate is to cover more than one item or building, the rating bureau requires that the policyholder give the amount of value in each separate risk and usually in the contents of each so that a correct average may be arrived at. The information required is a “statement of values.”
STOCK
Merchandise for sale or in the process of manufacture as distinguished from furniture, fixtures or machinery.
STOP LOSS REINSURANCE
A company wishing to protect itself in the event its net loss ratio for a given year rises above a certain percentage may buy reinsurance which pays in excess of that figure up to a higher agreed percentage beyond which the company is once more liable. In short, a plan which ameliorates an above-average net loss ratio.
SUBROGATION
When a company pays a loss for which some person other than the policyholder is responsible, the company’s right to recover its loss from the guilty party is the right of “subrogation.”
SUBSIDENCE
Damage due to the movement of the land on which property is situated. A house built on the side of a hill may slide down the hill due to heavy rain or some similar cause. Not earthquake damage.
SURETY
The underwriter who guarantees something under a bond.
SURPLUS LINE
Originally a risk or part thereof where the interested broker or agent had no available market. In recent years, the definition h as broadened to describe any business normally subject to state regulations as to rate and form written by an non-admitted insurer in accordance with the surplus line laws of the relevant state.
THEFT
The wrongful taking of the property of another.
TIME ELEMENT
A phrase used to describe a kind of insurance which reimburses the policyholder for the loss of use of property. The amount of loss depends on the length of time it will require to rebuild or repair or recover. Hence “time” element.
The State of North Carolina is a sovereign entity free from suit except where waived by the North Carolina General Assembly. The North Carolina Tort Claims Act (N.C.G.S. chapter 143) is the only waiver of the State’s liability for acts of negligence by State employees or agents up to the limits established by the act. Also, since North Carolina is a comprehensive state, there is a contributory negligence clause in the law that simply means that if the state agency is negligent under the law, the person suing must not have any negligence or contributed to the negligent act.
TOTAL LOSS
Loss of all the insured property. Also, a loss involving the maximum amount for which a policy is liable.
TREATY, REINSURANCE
Reinsurance treaties are agreements between companies whereby reinsurance is shared on terms set forth therein.
WAIVER
“The intentional relinquishment of a known right” is the definition adopted by some important courts. To illustrate, an insurance policy may set forth certain conditions with which a policyholder must comply under penalty of voiding his insurance, e.g., he may have accepted a policy in which it is stated that he must maintain a watchman on the premises or keep a sprinkler system in working condition. The company may forgo its right to the avoidance of the policy arising from the insured’s failure to comply. Such a waiver may be conveyed by implication as well as by direct statement.
WARRANTY
A statement by the insured on the literal truth of which the validity of the insurance contract depends. Warranties may relate to matters existing at or before the issuance of the policy (affirmative warranties) or may be undertakings by the insured that something be done or omitted after the policy takes effect and during its continuance (promissory warranties). Many states have restricted by statute the common law rule that “any breach of warranty avoids an insurance policy,” e.g., under the New York law (150), a breach of warranty to avoid the policy must have “materially increased the risk of loss, damage, or injury within the coverage of the contract.”
WATER DAMAGE INSURANCE
Insurance against loss due to the accidental presence of water in places it is not supposed to be. It is one of the covers of the additional extended cover endorsement, and also is written on special water damage policies by both fire and casualty companies.
WINDSTORM INSURANCE (including tornado and cyclone)
As the name would indicate, this is insurance against damage done to property by unusually high winds or by cyclones or hurricanes. Today most such liability is assumed by the “extended coverage” endorsement.
WORKER’S COMPENSATION INSURANCE
All states have laws that provide compensation to a worker injured while at work for an employer, whether or not the employer has been negligent. Insurance against such payments which an employer may be faced with is “worker’s compensation.”
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Property – Building/Property |
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Liability – Equipment/Event |
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Student Internship* |
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Student Study Abroad* |
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International Student Insurance* |
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Computer |
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Students Sickness and/or Accident |
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All Risk (Computers and Non-University fixed assets) |
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*These coverage’s require that you contact your Program Administrator for details
Contact the EHS Department for assistance at 336-334-7032 or 334-7992.