risk management and insurance basics - paul...
TRANSCRIPT
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Risk Management and Insurance Basics
Presented by Paul W. Stephens, ARMThe Church Insurance Agency Corp
A Service Provider to United Methodist Insurance
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Risk Management Defined ‐ Risk management is a disciplined approach to asset conservation. It involves more than just buying insurance; in fact, insurance may well be the last option after all other means of managing risk are thoroughly explored.
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The Five Steps of Managing RiskRisk management involves a set of strategies that may be employedindividually or in combination. They are normally undertaken in sequence.
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1) Risk Identification The two‐fold process of (1) examining your operation, from property holdings to operational processes, and identifying all risks that potentially threaten your organization’s assets; and (2) estimating each risk’s potential financial impact on your organization’s asset base.
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2) Risk Avoidance & Reduction The process of averting risk or mitigating it through operational planningand loss prevention / safety programs.
3) Risk Retention Self‐funding certain types and amounts of risk. An example of risk retention is an organization’s election of a $5,000 property insurance deductible instead of the insurer’s standard $500 deductible.
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4) Risk Transfer ‐ Risk transfer is normally accomplished through contracts such as insurance, leases and facilities use agreements, purchase orders, work orders, and similar covenants.
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5) Risk Monitoring The periodic process of re‐examining chosen risk management & Adjustment strategies and adjusting them to fit the organization’s financial and other objectives.
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Risk Management and The United Methodist Church ‐ The Book of Discipline 2012 Par. 2533.2 requires local church trustees to annually review and report on the adequacy of local church property and liability insurance coverage “to ensure that the church, its properties, and its personnel are properly protected against risks.”
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Defining “Properly Insured” via Minimum Insurance Standards – This approach is utilized as a way to (1) ensure an appropriate definition of “adequate coverage”, (2) provide flexibility and choice for the congregations served and (3) to limit and / or transfer administrative insurance related responsibilities.
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Property Coverage ‐ Buildings, Organs & Contents should be insured to Replacement Value to avoid an underinsured loss.
Equipment Breakdown – included up to the property limit.
Fine Arts ‐ $25,000
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Comprehensive General LiabilityOccurrence $1,000,000Aggregate $3,000,000
Sexual Misconduct LiabilityOccurrence $1,000,000Aggregate $2,000,000
Pastoral Counseling LiabilityOccurrence $1,000,000Aggregate $3,000,000
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Hired and Non Owned Auto LiabilityOccurrence $1,000,000Aggregate $3,000,000
Employee Benefits Liability (EBL)Occurrence $1,000,000Aggregate $3,000,000
Crime / Employee DishonestyOccurrence $25,000
Medical Payments $10,000
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Directors’ & Officers (D&O) $1,000,000
Employment Practices Liability (EPL) $1,000,000 (including Sexual Harassment, Discrimination and Wrongful termination)
Workers Compensation Bodily Injury each accident $1,000,000
Bodily Injury by Disease $1,000,000
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Owned Automobile Liability (if needed)
Liability ‐ $1,000,000
Comprehensive Coverage – optional
Collision Coverage ‐ optional
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UMBRELLA POLICY ‐ (suggested)
$1,000,000 (minimum)
The Umbrella policy must extend over Commercial General Liability, Pastoral Counseling, Employee Benefits Liability, Owned Auto, Hired & Non‐Owned Auto and Workers Compensation.
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Risk Management in Practice – Practical ways to better protect the people and property in our care.
General Risk Review
Building MaintenanceSafety ManagementVideo inventory of contentsDisaster preparationEmergency relocation planning
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People Risk
Pastoral Counseling (referrals)
Protecting Children (Safe Sanctuaries)
Life Safety Issues
Violence
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Activity Risk
Property use by outside groups
Certificates of Insurance
Permission Slips
Driver Requirements
Other operational risks
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Fiduciary Risk
Fiduciary duties shared between two or more people / non family members
Processing and deposit offering
Regular audits
Adequate Insurance Limits
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Building Risk
Roof / Structural
Electrical / Hazardous Liquids
Slip and Fall Hazards
Life Safety / Housekeeping
Fire Detection / Reduction
Emergency Egress
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Kitchen Risk
Commercial Stoves / Fire Suppression
Walk in Freezers
Refrigeration and Food Safety
Knives, chemicals and lifting hazards
General Housekeeping
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Grounds Risk
Walking surfaces
Playgrounds
Equipment
Water Hazards
Other Outside Hazards
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Can You Identify The safety hazard?
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BBQ Fundraising Auxiliary Closet
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Cluttered Boiler Room
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Renewable Energy Outlet
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Do‐it‐yourself Project 2012
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Alternative Use of Couplings
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Grits Storage in the Breaker Box
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Master Bath Renovation
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Another Approach to the Ceiling Fan
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Where Did This Mold Come From?
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Creative Basement Wiring
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Recycled Skoal Can = New Electrical Box
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Overcoming Obstacles
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Why is it so hot in here?
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Shower Outlet ‐ aka “someone call 911”
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Locked Exit ‐ Theft Prevention
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Inappropriate Playground Installation
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Temporary Electrical Solution?
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Donated 15 Passenger Van
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Deferred Maintenance ‐Missing Mortar
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Sprinkler System / Emergency Lighting
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Located in the basement below
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The best time to develop a comprehensive risk management, emergency preparedness, crisis management and relocation plan is ……
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Before the Storm
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Questions and answers
Thank you for attending this session