Pittsburgh Alliance for Response Risk Management, Loss Control & Insurance February 2009

1 S:\dep\acmg-Account Management\Cessar\PALINET.ppt Marsh Risk Management, Loss Control & Insurance What will we cover today?  To define the element of Risk Management, Safety, and Insurance.  To foster the sense of ownership that a Librarian or Administrator must feel and transmit to his/her staff.  To outline the financial impact of Risk Management, Safety, and Insurance on a library’s yearly budget.

2 S:\dep\acmg-Account Management\Cessar\PALINET.ppt Marsh Definition of Risk Management  Risk Management is the process of making and carrying out decisions that will minimize the adverse effects of accidental losses upon an organization. Making these decisions requires the five steps in the decision-making process. Carrying out these decisions requires the Risk Management professional to perform the four functions in the management process.

3 S:\dep\acmg-Account Management\Cessar\PALINET.ppt Marsh Managerial Process  Planning  Organization  Leading  Controlling

4 S:\dep\acmg-Account Management\Cessar\PALINET.ppt Marsh Risk Management Decision Making A. Perils Leading to Loss  Natural  Human  Economic B. Identification of Loss Exposures  Property  Net Income  Liability  Personnel C. Financial Consequences of Loss  Frequency  Severity

5 S:\dep\acmg-Account Management\Cessar\PALINET.ppt Marsh Insurance Coverage  Building  Business Personal Property – Equipment or Fixture  Business Personal Property – Materials or Supplies  Business Interruption  Extra Expense  Rental  Rental Value

6 S:\dep\acmg-Account Management\Cessar\PALINET.ppt Marsh Claims Adjudication  Risk Manager  Adjusters  Brokers

7 S:\dep\acmg-Account Management\Cessar\PALINET.ppt Marsh Pre-Loss Preparation  Utilize All Appropriate Property Loss Control Assistance – Fire Extinguishers – Sprinklers – Smoke Detectors  Identify Data Gathering Process  Protect Records  Consider a Detailed Inventory  Appoint Key Contacts  Consider Loss Scenarios  Use Resources of Insurers to the Fullest  Consider a Budget Line Item

8 S:\dep\acmg-Account Management\Cessar\PALINET.ppt Marsh During Loss  Notification  Fire Protection  Protect Property from further Damage  Begin Salvage Process  Track Claims Costs  Make Temporary Repairs  Arrange for Permanent Repairs  Resume Operations

9 S:\dep\acmg-Account Management\Cessar\PALINET.ppt Marsh Potential Problems  Policy Exclusions  Values  Limits  Appraisals  Local Building Codes

10 S:\dep\acmg-Account Management\Cessar\PALINET.ppt Marsh Property Loss Checklist DateNotification List at Time of Loss  Notify risk manager, senior management, risk management, and affected departments  Notify insurer and broker  Notify emergency team DateLoss Information to Report  Name and address of insured  Location of loss  Type of loss (fire, explosion, etc.)  Property involved (building, contents, EDP, etc.)  Extent of damage (dollar estimate)  Contact name, phone, and fax number DateSteps to Limit Further Damage  Restore fire protection (sprinklers, hoses, etc.)  Make temporary/emergency repairs  Secure vital records and ledgers  Begin salvage and cleanup  Expedite long-term repairs to essential equipment DateReview Coverage (in conjunction with broker)  Property coverage  Time element coverage  Perils insured  Location covered  Valuation (replacement cost, selling price, etc.)  Deductible  Check to see if more than one policy may cover loss  Check to see that loss payable/mortgagees are correctly listed

11 S:\dep\acmg-Account Management\Cessar\PALINET.ppt Marsh Property Loss Checklist (Continued) DateProperty Damage Claim Submission  Request advance/partial payment  Obtain repair estimates or appraisal documents from contractors for structural damage  Assemble blueprints, plans, drawings  Copy and store invoices for completed work or cleanup  Get replacement invoices for business personal property  Document insurable interest in damaged property  Acquire copies of police or fire reports  prepare photos or videos as proof of damage  Gather asset records (physical or perpetual) to support damaged property  Set up special work orders, job numbers, or accounting procedures DateBusiness Interruption Claim Considerations  What type of operation is affected?  Is there interdependency with other operations?  What is expected downtime?  Is production partially or totally down?  Are operations affected? Partially? Totally? At all?  What steps can be taken to get you back into operation earlier?  Can alternative facilities be used?  Can rental equipment, overtime, or additional shift work be used to reduce the loss? If so, differentiate between normal and increased expenses, as well as rent and overtime  Are major product lines affected?  Are there limited markets or major suppliers?  Can the product be purchased/produced in the marketplace?  Could sales or services be conducted elsewhere?  If you can demonstrate the monthly business interruption value of the affected part of operations, request partial payment