Managing Risk in Academic Placement

AgreementsJoseph C. Risser, CPCU, ARM-P

Director, Risk ManagementCalifornia Polytechnic State University

Academic Placement

University placement of students in off campus environments in order to provide course required work experience component of academic program

Typical Academic Programs

• Nursing• Teaching• Service Learning• Other Technical or Professional

Programs

Critical Partnerships

• Hospitals

• Schools

• Businesses

• Government Agencies

• Non-Profits

Issues of Concern

• Injury to the student & damage to the student’s property– Travel to and from assignment– Performing work of Host Entity

• Injury to others and damage to property of others by the student

– Host Entity – Third parties

• Injury or damage caused by University employees related to the placement and/or within the Host Entity’s facilities

– Directing or supervising students

• Injury or damage caused by Host Entity employees while performing training or supervision of assigned students

Who Is Responsible?

• Student– Choice of program of study including the requirement of

placement– Performance in the assignment

• Host Entity– Location, Facilities, Equipment, Personnel, Activities of the

required placement– Reporting on student activity and performance

• University– Design of program of study including the requirement of

placement– Selection of and agreement with Host Entity– Evaluation of the student activity and performance

Student Placement AgreementsExecutive Order 849

• Agreements shall be in writing

• Specify appropriate hold harmless provisions based upon needs of parties

• Specify minimum insurance requirements applicable to the contracting parties

Written Agreement

• Identify the parties

• State purpose of agreement

• State purpose of placement

• Describe the assignment environment

• Detail the activities of the assignment

• Describe the terms and conditions

• Assign Responsibilities

Hold Harmless

_________ shall be responsible for damages caused by the negligence of its officers, employees and agents. Trustees shall be responsible for the damages caused by the negligence of its officers, employees and agents. The intent of this paragraph is to impose responsibility on each party for the negligence of its officers, employees and agents.

Minimum Insurance

Type Coverage Limits (minimum)

General Liability (Commercial or Comprehensive) CGL

Injury, damage and contractual liability from their “work”

$1 Million / occurrence

$2 Million aggregate

Automobile Liability (Commercial or Business Auto) CA or BA or AL

Injury & damage from their ownership & operation of autos

$1 Million combined single limit per accident

Workers’ Comp& Employer’s LiabilityWC & EL

Work related injury or illness for their employees

WC - Statutory Limits EL - $1 Million per illness and injury

Benefit to Host Entity

Placed Student is providing service which is of some economic benefit to Host Entity, i.e. working side by side performing the same function as other paid workers or volunteers; or performing services that otherwise would be provided by a paid employee or volunteer of Host Entity.

Control by Host Entity

• Location• Facilities• Equipment• Materials• Processes• “Customers”• Activities

University Ideal Student Placement Agreement

• Host Entity Holds “University” Harmless– Indemnifies the University?– Losses related to student assignment

• Host Entity acts as employer of assigned student and is responsible for:– Injuries or damage caused by student– Injuries or illness of student

• Host Entity is responsible for its employees directing & controlling student

University IdealStudent Placement Agreement

• Host Entity provides proof of insurance– General Liability - $1M / $ 2M (minimum)

– Automobile Liability - $1M CSL – as appropriate

– Workers’ Compensation – Statutory Limits– Professional Liability - $1M / $1M (minimum) – as appropriate to the

activities of the Host Entity

• Host Entity’s insurers: – Name University as additional insured (GL)

– Insurance is primary and University coverage will not contribute (GL)

– Workers’ Compensation waves right of subrogation against University

– Will provide 30 days written notice of cancellation of coverage

HOWEVERHost Entity May:• Consider it is doing a favor or service for the

University, expect to be protected from any loss

• Consider that it is taking on exposures to additional risks, expect to transfer those risks as consideration for the placement opportunity

• May not have specific insurance (all volunteers)

• Want to be indemnified by the University, for any losses related to the student assignment

• May want the University to provide insurance coverage for the student (general, professional, workers’ compensation, automobile)

AdditionallyHost may want the University to:

• Provide background check

• Provide health screening, inoculations

• Warranty of skills, competencies, background, safety, etc.

• Indemnify Host Entity for activities of– University employees on site– Host Entity employees providing instruction

Consequences for the University

If required to indemnify the Host Entity and/or provide liability coverage for the student the University may be exposed to:– Liability for the student’s injury or property damage – Liability for the student’s injury or damage to others– Liability for the actions of the Host Entity related to the student

assignment

SIGNIFICANT FINANCIAL LOSS

Key Considerations

• Importance of the Student Placement Assignment to the Academic Program

• Availability of Student Placement Assignments for this Academic Program

• Risk Controls for this Student Placement Assignment (Best Practices for Managing Risk In Service Learning)

• Tolerance of the responsible Administrator for additional risk exposures & losses

Risk Identification & Evaluation

In the Student Placement Assignment with the Host Entity:

1. What activities will take place?2. Who could be harmed and how severely?3. What property could be damaged and how severely?4. What is the possible maximum loss for each activity?5. Is there a possible pollution exposure?6. Are crowds or bystanders/passer-bys likely to be

involved?7. Will inherently dangerous activities be involved?8. How likely is it that the University will be a defendant or

contractually responsible in the event of loss?

Develop Agreement

• Understanding the value of the placement

• Understanding the risks of the placement

• Encourage Host Entity to accept students as “employees” or “volunteers” in their established program

• University should not employ or identify as University volunteers, assigned students

Reduce University Exposures

• Limit our indemnification of the Host Entity– Mutual Hold Harmless– Hold Host Entity Harmless– Mutual Indemnification– Indemnification of Host Entity

• Require proof of insurance appropriate to Host Entity’s activities– General Liability– Workers’ Compensation

• As Appropriate– Professional and Automobile Liability

Reduce University Exposures

• Limit our contractual extension of liability coverage– Require students to have appropriate general or professional

liability coverage– Coverage for injuries or damage caused solely by student– Host Entity as Additional insured

• Limit our contractual extension of workers’ compensation coverage– Require Students to have appropriate health coverage– Coverage for injuries or illness of student due to activity of

assignment– Waive subrogation against Host Entity

Reduce University Exposures

Limit our responsibility to provide or warranty:• Background check,

• Driving record,

• Fingerprinting

• Medical screening, inoculations, records

• Skills and Competencies screening

• Personal Protective Equipment

– Require students to obtain and provide to Host Entity– Have Host Entity obtain or provide as they do for their

employees and volunteers

Document• Risk Identification and Evaluation

• Modification to Executive Order 849 minimum requirements for placement agreements

• Signed by responsible administrator

HIPPA

Business Associate Agreement

• CSU (campus) does not perform or assist in the performance of covered functions on behalf of the Host Entity

• Agreement for academic placement of student does not create a Business Associate relationship between the Host Entity and the CSU (campus).

What about the Student?

• Party to the Agreement?

• Coverage for actions, injury, damage, negligence?

• If University extends coverage, responsibilities of student and processes?

• Interfacing with University Workers’ Compensation and Risk Management

QUESTIONS?

THANK YOU

References

• CSU Executive Order 849http://www.calstate.edu/eo/EO-849.pdf

• CSU Contract Services and Procurementhttp://www.calstate.edu/CSP/crl/crl.shtml

• CSU - Best Practices For Managing Risk in Service Learning http://www.calstate.edu/csl/documents/Final_draft.pdf

Joseph C. Risser

• Chartered Property Casualty Underwriter (CPCU)

• Associate of Risk Management – Public Entities (ARM-P)

• Director, Risk Management, California Polytechnic State University, San Luis Obispo

• Executive Committee, Board of Directors, California State University Risk Management Authority

• jrisser@calpoly.edu• 805-756-6755 office• 805-756-1602 fax