UKGC Self-Funded Property Program
Annual Property Revaluation and Renewal
Boiler and Machinery Program
Art Exhibit Policy
Property Use Agreements
Insurance Coverage for Employee’s Personal Property
Subject: UKGC Self-Funded Property Program
The purpose of this paper is to explain the UKGC Self-Funded Property Program (UKGCSPP) as it relates to the Client, and the procedures Client’s risk managers should follow to receive the benefits of this coverage.
The UKGC Self-Funded Property Program provides coverage for loss of Client-owned real and personal property, motor vehicle physical damage, business interruption (revenue loss that occurs as a result of property loss), extra expense (incurred after a property loss to maintain operations), and some bailments.
The UKGCSPP is administered through the UKGC Office of Risk Management through which all final coverage decisions and loss payments are made. In general, the underlying UKGCSPP coverage follows the form of the excess property policy. However, individual losses are adjusted at the discretion of UKGC Risk Management. The conditions set forth in the excess policy form a guideline for describing what exposures and perils will be covered in the event of a loss.
1. Covered Real Property
Real property includes buildings and related service fixtures and equipment. Coverage under the UKGCSPP applies to real property that is owned, in which the Client’s real property has an insurable interest, or is under contractual obligation to insure. Included in the definition of real property are supplies, tools, machinery and permanent structures which service the buildings; tanks, flues, pipes, drains, wiring, underground tunnels and passages, fixtures, built-in appliances and permanently installed floor coverings.
2. Excluded Real Property
The policy excludes coverage for growing crops, trees, shrubs, lawns, land or land value, foundations, roads, sidewalks, pavements, pipes which contain wiring below ground, and floating docks.
3. Covered Client’s Personal Property
Personal property (exclusive of motor vehicles) is essentially contents within a building which are not permanently erected or attached to the building. Coverage applies to personal property that is owned by the Client in which the real property has an insurable interest (eg. equipment which it leases), and property belonging to others but which is in the custody of the office (except when the office is acting as a warehouser or bailee for hire). Additional covered property may include livestock feed, fine arts, fabricated equipment, improvements and betterments to non-owned buildings, and personal property of officers and employees while it is on the office.
4. Covered Individual Personal Property
It is possible for employees personal property to be covered under this category provided all of the following conditions are met.
1.Itemized listing of items and estimated value of each item is in the possession of the Client’s risk manager;
2.Signed approval by the President (Director) or assistant is on record with the Client’s risk manager;
3.Items benefit the mission of the Client;
4.Values are reported to System Risk Management annually; and
5.Itemized listings are subject to audit.
5. Excluded Personal Property
Coverage is excluded for deeds, bills, manuscripts, securities, evidence of debt or title, jewelry, precious stones, precious metals, watches, silverware, fur, and computer software that can be duplicated. Coverage may be afforded for these items when they are reported in the Client’s annual property renewal value report.
6. Covered Causes of Loss
Coverage is afforded against all causes of direct physical loss except as listed below:
1.Electric injury or disturbance to electrical appliances, devices or wiring from artificial causes, or mechanical or machinery breakdown; this exclusion does not apply to electronic data processing equipment.
2.Explosion, rupture or bursting of pressure vessels or pipes, steam boilers, steam pipes, steam turbines, steam engines or flywheels. Resultant damage to other property is covered unless otherwise excluded.
3.Damage sustained to that part of the property which is actually being worked upon or caused by repairing, adjusting, servicing, or maintenance operations testing. Resulting damage to other property is covered unless otherwise excluded.
4.Delay, loss of market, gradual deterioration, inherent vice, insect, vermin, ordinary wear and tear.
5.Loss or damage caused by or resulting from contamination or pollution, unless resulting from fire, lightning, extended coverage perils, earthquake, falling objects, weight of snow, ice or sleet, collapse, water damage, leakage or accidental discharge from a sprinkler system.
6.Loss or damage caused by or resulting from settling, subsidence, cracking, shrinking, bulging, or expansion of pavement, foundations, walls, roofs, floors, and ceilings.
7.Expense resulting from government direction or request that a material that can no longer be used for its intended purpose be removed or modified.
8.Debris removal unless it is the result of a covered peril and at a covered location.
9.Nuclear incident and loss from hostile or warlike power.
10.Exposure to rain, sleet, snow, and wind driven sand or dust has been covered.
11.Freezing of plumbing or heating systems or their appliances, or by leakage overflow from such systems or appliances while the building in which they are located is vacant or unoccupied, unless the Client has exercised due diligence in maintaining heat in the building, or unless such systems or appliances have been drained and the water supply shut off during the vacancy or un-occupancy.
12.Loss due to employee or officer dishonesty, any unexplained loss, mysterious disappearance, or shortage disclosed on taking inventory.
Territorial Restrictions: Coverage is worldwide with regard to personal property.
Property which is owned by the Client while in transit is subject to loss. The party who will bear the risk of loss depends on the type of contract between the Client and the vendor, property owner, or shipper. Most often, the risk of loss is transferred at the point where title to the goods is transferred. In the absence of contractual language that specifies who is responsible for the loss, the following risk of loss rules apply:
Shipping Point Contracts — the buyer bears risk of loss.
Destination Contracts — the seller bears risk of loss.
Sale on Approval
In a sale on approval situation, possession, but not title to the goods is transferred to the buyer for a trial period. In the absence of a contract, both title and risk of loss are on the seller until the goods are approved or accepted by the buyer. While the goods are in the potential buyer’s possession or in transit either to the potential buyer or seller, risk of loss is on the seller. A situation involving sale on approval would include a department using a piece of equipment for a period of time with the option to purchase it if the department approves of it.
Sale or Return
In a sale or return situation, the goods are delivered to the buyer with an option for the buyer to return leftover goods to the seller. The risk of loss is on the buyer while the goods are in the buyer’s possession. When the buyer decides to return the remaining goods to the seller, risk of loss remains with the buyer until the goods reach the seller. An example of a sale or return situation is when the buyer possesses the goods in order to resell them (eg. garden seeds). At the end of a particular time period, the buyer returns to the seller the seeds, which remain unsold.
1. Excluded Transit Exposures
Accounts, bills, jewelry, precious stones, currency, notes, securities, evidences of debt, animals, aircraft, watercraft, vehicles, loss resulting beyond the direct physical loss to the insured property, airborne , waterborne shipments, and property shipped by mail.
2. Covered Transit Cause of Loss
Covered property while in transit is insured against all risks of loss from any external causes except as listed below:
1. Leakage, breakage, marring, scratching, dampness or dryness of atmosphere, extremes or changes of temperature, shrinkage, evaporation, loss of weight, rust, contamination, change in flavor, color, texture or finish, unless such damage is caused directly by fire, lightning, windstorm, hail, explosion, riot, aircraft; vehicle or vessel other than the transporting conveyances, bursting of pipes or apparatus, vandalism, malicious mischief, theft and attempted theft.
2. Automobile Physical Damage Exposures
Physical damage coverage is available for all vehicles except those vehicles which are used to transport people or property for a fee.
3. Covered Auto Physical Damage Cause of Loss
Coverage applies for all risk of loss due to physical damage except as listed below: Wear and tear, freezing, mechanical breakdown or failure, loss to tires unless damaged by fire, vandalism, malicious mischief or theft.
4. Miscellaneous Provisions
1. Territorial Restriction
Coverage applies only to vehicles within the territory where Client is Resident. Vehicles taken outside this territory must purchase both liability and physical damage coverage before departure.
2. Rental Vehicles
Collision Damage Waivers should not be purchased when renting a vehicle. If the Client has physical damage coverage on comparable State-owned vehicles, then the rental car will be covered as if it were Client- owned. Collision damage coverage is normally included in the rate charged by the contracted rental firms as part of the purchasing agreement.
3. Windshield Replacement
Auto Glass Specialists is the State’s vendor for vehicle glass repair and replacement and should be used whenever possible. The state purchase order number must appear on all invoices. The number changes with each fiscal year; contact Risk Management for the number. When glass is repaired or replaced by this establishment, no deductible will apply.
It is to be emphasized to your drivers and anyone else who may be in a position to use these services that Auto Glass Specialists is to be used at all times for the replacement or repair of glass ONLY. Auto Glass Specialists will schedule the repair with their field person.
If you have a vehicle incident out of state, you may call Auto Glass Specialists. They has service centers and will provide coverage in your area.
If the State is responsible for damage to glass of a private vehicle, you can use Auto Glass Specialists for the repairs. An example would be if a state employee is mowing grass at a state-owned facility and a rock is thrown up and breaks the windshield of a vehicle not owned by the state, we might be responsible. If it is determined a state employee is responsible for damages of this nature; you should set up an appointment with Auto Glass Specialists to repair the glass damage to the vehicle. Do not give the vehicle owner the purchase order number.
If an emergency situation arises for glass replacement and Auto Glass Specialists cannot meet your needs, another vendor may be considered. Auto Glass Specialists has made a commitment to provide statewide mobile service on a same or next day basis. If another glass company is used, you should let them know the repairs are to Client’s vehicle. You will also have to justify to state risk management and state purchasing why Auto Glass Specialists was not used for the repair/replacement work. Any difficulties in obtaining service under this contract should be documented and reported to Risk Management or the Bureau of UKGC Risk Management. Documentation, including a phone number of the employee involved, will be required for payment justification.
3. Builder’s Risk Coverage
Builder’s risk coverage provides coverage for property in the course of construction. This coverage applies to new, free-standing structures, as well as existing buildings undergoing additions, improvements, remodeling, etc. These projects are all covered under the UKGCSPP.
1. Verbal Notification
Claims < $500
no claim, does not exceed deductible.
Claims > $500
no verbal notification necessary.
Claims > $7500
notify System Risk Management (SRM) within 24 hours of an occurrence with basic details.
Claims > $10,000
If a loss appears as if it will approach $10,000 in damage, notify SRM. They will in turn engage the UKGC.
Property loss to a leased vehicle
notify SRM only if a liability claim is likely to result from the incident. Send property claim information to the UKGC Manager.
Loss to a rental vehicle
file a claim as if it were an owned vehicle.
2. Written Notification
Gathering sufficient documentation of the loss is important in order for the claim to be settled in an expedient manner. The departments or individuals suffering a loss are often willing to supply information upon request. It is important for the Client’s risk manager to be aware of the information that is necessary for a claim to be filed.
The following are items that are to be submitted in order for a property claim to be successfully filed:
Proof of Loss Form
gives an overall picture of how, when and where the loss occurred, provides business unit and fund of department effected by loss
Estimates or Invoices
from vendors or contractors supports labor and material numbers. Two estimates are required for motor vehicle damage greater than $500.
Internal Work Orders
supports Client’s labor and material figures. Note: An additional 28% overhead charge should be multiplied to the Institution’s own labor value if the overall labor balance is greater than $100.
Police Reports
required only for theft, vandalism and collision.
Original Purchase
required to substantiate age and value of property in order to depreciate it.
Vehicle Incident Report
Form DOA-6496 (Formerly AD-86 for vehicles only).
Lightning Affidavit
to evidence that damage was caused by lightning. The form is to be signed by the repair company.
Other Useful Info
memos from departments detailing how the loss occurred, photographs, other supporting documents.
3. Overhead
When Client’s labor is used to repair a damaged item, a 28% overhead charge is multiplied by the labor total if the labor balance exceeds $100. The overhead charge should be submitted to System Risk Management on a sheet which is separate from the rest of the claim. For more detail on this topic, refer to Part 9B of this document.
4. Deductibles
Deductibles are applied per occurrence and the institution sustaining a loss will be responsible for a $500 deductible per loss occurrence. Effective 7/1/2005 a $2500 deductible per occurrence applies to incidents involving theft with no evidence of forced removal or entry. Examples of forced entry or removal include visible pry marks or broken glass. No deductible applies to vehicle glass breakage when State glass vendors are used.
5. Property Valuation
Contents are covered for replacement cost or the cost to repair, whichever is less. Vehicles and farm machinery are insured for their actual cash value (bluebook price).
6. Transit Losses
1. Institution receives damaged goods from a carrier:
1.Do not sign delivery receipt until shipment has been inspected for damage to the carton. Note any shortage or damage on the receipt and have driver sign it.
2.If it appears that the contents may be damaged too, open the carton with the driver still present, note damage on the receipt and have the driver sign it.
3.In any event, open all cartons as soon as possible after delivery and inspect for concealed damage. This must be done at the delivery location.
4.If concealed damage is discovered, notify the purchasing department upon discovery. Do not remove package from receiving area. The items must remain there until a claim is settled (which could take several months). The institution must retain the damaged container.
5.If the transportation is provided and insured by the Postal Service, the department should settle the claim directly with the Post Office.
2. Institution has sent items to another party, and the items have been damaged or lost in transit:
1.If the Client was responsible for insuring the item in transit, attempts should be made to recover from the carrier through immediate correspondence.
2.If the Client receives no or partial recovery, a property claim for the remaining loss should be filed with State Risk Management (SRM). Include a copy of the transportation log page where item appears.
Subject: Annual Property Revaluation and Renewal
The purpose of this section is to explain the necessity of and the procedures for the annual update of property values by each Client’s division and by Client’s legal entity.
For a variety of reasons, asset management is a key function of the risk management offices throughout the Client’s legal entity. Property control through the use of valid inventory systems is a major goal of all the divisions of Client. Two vital risk management applications for both facility and contents are accurate claims settlement and equitable computation and allocation of property premiums.
Content inventory is defined by System Risk Management (SRM) as all Capital Equipment, Non-capital Equipment and Supplies. Each Client’s institution is responsible for maintaining a current capital inventory system. SRM requests inventory data annually in order to update System records and develop a premium allocation schematic.
Currently a master facility list is maintained on a PC-based database by SRM. Division of Client’s Facilities (DCF) maintains a list of Client’s owned facilities. Updates to the master facility list are input into the database periodically by SRM and annually through a data disk download from DCF.
Annually, each Client’s institution is required to complete the necessary property valuation forms as follows.
1. Facility/Content Worksheet
This worksheet, which is generated by the contacts for each institution, shows the projected Replacement and Cost Values of facilities as of July 1. Please review the list of facilities and their values with your Planner to ensure the reports accuracy.
2. Content Values
Beginning Client’s institutions determined their contents by using a square footage factor times the square footage of the facility. Remember — library books are to be added back into the library content figures. Library book figures are to come from the library directors who may use the Bowker Index to arrive at their book values. Keep in mind, this factor does not include library books, movable equipment, or farm values. Values shown on the Facility/Content Worksheet are not to be included in Section II of the Inventory Valuation Summary Form, as this would duplicate the numbers, resulting in higher premiums. Only movable equipment is to be shown in Section II of the form. Movable is defined as equipment that would leave its home building on a regular basis. Library books are to be included in the value of the library contents, not movable equipment.
1. Vehicles
Collision and comprehensive coverage for automobiles is required and it must be purchased for all vehicles. An itemized list must be maintained by the institution and is subject to audit. The values reported are the original acquisition costs. Vehicles are only insured for their actual cash value.
2. Movable Equipment/Inland
The moveable equipment/inland tables show a stated value in place of your boats and accessories, musical instruments, photography equipment and portable computers and accessories. This value reflects an average of two years, of reported equipment prior to the capitalization level of $5,000. This value is to be used by the Client’s institution for those categories unless there is justification why the number should be less. Then an explanation must be given to SRM and upon their approval the number may be lowered. In addition, values may be increased without input from SRM.
The coverage provided for movable equipment and contents is replacement cost. Farm equipment and vehicles are covered for actual cash value. Movable is defined as equipment that would leave its home building on a regular basis.
a. Fine Arts
Items which remain in a facility on a permanent basis are considered contents. Articles that move between buildings on a semiannual basis or more frequently, are considered moveable equipment.
This definition is under review and may next year, include all fine arts, whether it remains in a building or not.
b. Art Exhibits on/off the Premises
The reported value is to reflect the total value of all exhibits that may be at Client’s institution at any one time, taking into consideration the time prior to and after the actual exhibit period. In addition, the Client’s institution is to list the total value of all exhibits held during the year. Remember, transit to the Client’s institution may not be covered; coverage may be afforded if the institution Risk Manager is contacted and agrees to cover the exposure. If we are responsible for insuring exhibits that are coming to or leaving Client’s office and are worth more than $100,000 in any one shipment, transit coverage MUST be discussed with SRM prior to the shipment.
c. Transportation Coverage
The institution’s Risk Manager must be notified of any shipment of $50,000 or more as this needs to be reported annually to SRM for determining premium charges. Shipments worth $100,000 or more must be discussed with SRM. A value is to be reported to reflect the total value of all parcels that may be in shipment at any one time. Keep in mind the value of scientific instruments, computers and other items being shipped to the manufacturer for repairs may require us to insure them during shipment. Include total Client’s institution shipments for the year.
d. Cash and Cash-like Item
There is coverage available for cash and cash-like items; however, coverage is excluded for employee dishonesty, which is covered under the Client’s Crime Policy. Due to the difficulty in determining the value to report for this purpose, the following are minimum suggested amounts:
Four-Year Client’s Institutions
-$100,000
Center Legal Entity
-$ 25,000 per Client’s institution
Extension
-$ 50,000
e. Borrowed/Loaned Equipment
This category is meant primarily for those items that manufacturers and/or vendors make available for our use, often at no charge. Attempts should be made to keep the manufacturer/vendor responsible for the unit, but if this is not possible, it can be covered under this category. At a minimum, $250,000 should be shown. (If the Client’s institution borrows equipment worth more than $250,000, its anticipated value should be shown.) In addition, the institution is to list the total values of all borrowed/loaned equipment used during the year.
In general, the UKGC Self-Funded Property Program is intended to provide coverage on Client-owned property. However, there are situations where personal property of staff may be considered "on loan" to the Client’s institution.
The owners have the primary responsibility to insure their equipment. However, if evidence is furnished that indicates the insurance was not available, the UKGC Self-Funded Property Program may provide coverage provided the following are met:
1.At the time of the loss it must be shown that the borrowed item was not insured by other insurance.
2.The personal property must be used on Client’s business during the time period for which coverage is requested.
3.Itemized listing of the personal property must be on file in the Client’s Institutions risk management office.
4.The personal property will be insured for a limited period of time and/or for a specific project or need. This time period must be specified in writing prior to acceptance by the Client’s institution agreeing to cover the item(s).
5.The availability of the personal property definitely benefits the department by providing equipment that is truly needed and that the Client’s institution would be required to otherwise purchase from other resources.
6.The personal property will be subject to our standard deductibles of $500, with a $2,500 deductible where there is no evidence of forcible entry or removal.
7.The maximum coverage on any one item is $50,000.
8.Values to be summarized and reported to SRM annually and itemized listings are subject to audit.
9.Coverage is subject to the UKGC Self-funded Property Program exclusions.
f. Farm Coverage
Farm equipment is covered for actual cash value (ACV) and should therefore be reported at its ACV on the Farm Property Worksheet. Livestock is divided into Class I (Livestock) and Class II (Registered Livestock). The lower-valued (Class I) livestock should be grouped together under the various classes as shown in the worksheet. Dollar limits per animal should be inserted to reflect the current value per head. Registered (Class II) livestock should be identified on a separate list by the registration number and individual value. This list is to be maintained on Client’s Legal Entity and is subject to audit.
The premium charged for the grain and hay will be based on the average value expected to be in the facility during the course of the year. If you wish to insure hay, straw, or fodder in the open, it can be insured for fire coverage only, provided it is in stacks or bales. The maximum coverage for any one stack should be established by the Client’s institution.
3. Business Interruption and Extra Expense — (Attachment)
Client’s Institutions are subject to business interruption losses. Business interruption is normally written on those activities and structures that are profit producing, such as athletic events, residence halls, tuition centers, bookstores, etc. To insure for this type of loss, the Business Interruption Schedule MUST be completed. The Business Interruption Worksheet is included for determining the amount of coverage. Unless requested not to, we will automatically include this coverage on the boiler and machinery policy if the Client’s institution so elects it.
Extra Expense coverage is currently afforded in our program. Extra Expense is defined as the expediting costs incurred during the period of restoration over and above the normal restoration cost.
Subject: Boiler and Machinery Program
The purpose of this paper is to explain the Boiler and Machinery Policy of the Client’s business, and the procedures that Client’s institution risk managers should follow to receive the benefits of this coverage.
System Risk Management (SRM) continues to obtain commercial insurance. Annual premiums are charged to SRM and allocated to the institutions based on institution’s property values and the previous three years of loss experience. These premiums will continue to be competitive as long as there is proper maintenance to avoid unnecessary down time and the potential of injury to staff and or the public.
Carrier
(Name of commercial insurer here, for example UKGC)
Policy Date
November 1 (for example)
Limits
$50,000,000 per accident
Deductibles
$100,000 direct damage,
EXCEPT: Perishable Goods, 10% of loss, min. of $5,000
EXCEPT: $25000/HP, $10,000 min on all chillers
EXCEPT: $150,000 for the 9.8 MW steam turbine/generator unit
INDIRECT DAMAGE: 30 days for all turbine/generator units
24 Hrs on Business Interruption
Consequential
$100,000 per incident — $5,000 Deductible
Damage
$500,000 loss limit
Coverage
This policy will pay for direct damage to property owned by the Client’s institution (name here) or property in the care, custody, and control of the institution for which we are legally liable. A covered cause of loss is sudden and accidental breakdown of any refrigeration vessel, refrigerating compressor and its driving electric motor, any turbine, and any generator.
Coverage
The policy will pay reasonable expediting expenses, extensions for temporary repair, newly acquired locations, defense of third party claims, and supplementary payments.
Exclusions
Some exclusions include Ordinance or Law, Explosion of a non-covered item, Fire, Water, Lightning, Flood, Testing, Earth Movement, Lack of power, Other indirect result of accident to an object, Deterioration, Corrosion, Wear & Tear, and Breakdown of peripheral instruments.
To Report a Loss
(Phone and Fax numbers here)
- oidentification of machinery, including serial number, make, and model of the equipment;
- odescription of the loss, cause, and subsequent damages sustained;
- odollar estimate of loss amount;
- oname and phone number of the institution contact person for your commercial insurer.
- othe serial number, model and make of the item;
- othe location of item;
- ocapacity of boiler.
4. For more detail on policy coverage please contact SRM.
5. Procedures:
A. Loss Reporting
In the event of a loss, immediately notify the SRM office so your commercial insurer may be contacted. Initial notice must be given by phone or by facsimile within 12 hours of the loss. Give immediate notice to SRM at work or home if you interpret the loss as serious in nature. Initial notice should include the following details:
Within five days of the loss, written notification should be sent to SRM providing the above information plus any other details of the loss, status of the loss inspection and settlement procedures.
Damaged machinery or lines and other evidence of cause of loss must not be removed prior to the arrival of the your commercial insurer loss control contact. Efforts should be made, however, to minimize the amount of damages, including related down time.
B. New Boiler Location Reporting
Any time an institution risk manager becomes aware of a newly installed boiler or of a boiler that was not previously reported, this information must be conferred to SRM so that we may add the location to the boiler location list. Included in the boiler description should be:
Subject: Art Exhibit Policy
The purpose of this paper is to explain the Art Exhibit coverages available, and the procedures Client’s personnel should follow in order to benefit from this program.
Coverage for art exhibits is available through the UKGC Self-Funded Property Program. Coverage exists for:
In general, artwork, which the Client has agreed to insure prior to the loss is treated as a property exposure despite the fact that it may appear to be a liability exposure. This does not preclude the possibility of an art loss being handled through the liability program in situations where property protection does not apply and negligence exists. In addition, coverage is generally not available for art, which is being shipped to the office of Client’s entity. However, special circumstances may warrant review by the Client’s risk manager.
Department personnel and other Staff should follow the procedures described in this paper and use discretion when explaining the availability of coverage to exhibitors. Because unusual circumstances may preclude coverage, staff should not offer assurances of coverage at or before the time of a loss, but rather, contact risk management if clarification is needed.
All losses are subject to a $500 deductible, although a $2500 deductible applies for art which is stolen without evidence of forced entry or removal of the object (eg. cut cables, broken locks or pry marks). The department sponsoring the exhibit is responsible for reporting any losses to Client’s risk management via the enclosed art loss form and will be expected to pay the deductible.
1. Art objects which are a permanent part of Client’s property can be insured by listing them on the Client’s annual inventory at their appraised, acquisition, or donation value. To assure adequacy of coverage, items worth over $10,000 should be appraised upon acquisition. It is in the best interest of the Client’s that current certified appraisals of art be kept on record.
2. Owned artwork which is to be exhibited off Client’s office must be listed as movable equipment on the annual inventory listing. If the artwork is not listed as movable, a written request for coverage must be sent to the Client’s risk manager prior to an off Client’s office exhibit.
3. Art exhibits which are non-owned and non-permanent may be subject to different valuation methods. The following information should be discussed with the appropriate personnel prior to an exhibition in order to avoid disagreements once a loss occurs.
1. An appraisal is requested for any artwork which is valued greater that $10,000.
2. Professional artists and art collectors are expected to furnish proof of previous sales of similar works, or appraisals in order to document the value of a loss.
3. Non-professional artists or art authors will be asked to furnish receipts or evidence of previous sales, proof of the cost of time and materials, photographs of the artwork, appraisals of remaining works, etc. to substantiate the value of their artwork at the time of loss. Losses will be negotiated between the UKGC, and Client’s risk management, and the Staff. Experience has revealed that claims from non-professionals have been difficult to adjust due to the lack of market price evidence.
4. Art exhibits which are being shipped from a Client’s office will be valued according to the above criteria with appraisals requested for art over $10,000 in value.
0. Annually, Client’s risk management should send an art inventory form to each department. All owned art should be listed on this form each year. If the art is to be exhibited off Client’s office, it is to be listed as movable property.
1. For non-owned art exhibited on the Client’s office, an Art Exhibit Protection Form (attached) must be completed by the artist, exhibitor and department chairperson prior to the exhibit and submitted to the Client’s risk management office. This form summarizes the number and value of works and the dates the objects will be in the possession of the Client.
2. Upon receipt of exhibits, each item must be immediately examined for any possible damage, which may have occurred during transit. Any damaged packaging must be kept and signs of poor packing must be documented to substantiate loss.
3. Client’s office a risk management is to be notified of all art shipments made by the office. Reports must be kept on file in the risk management office.
4. Exhibits which we send from a Client’s office which are valued greater than $100,000, must be reported to UKGC Risk Management. The artwork should be packed by only qualified personnel and shipped by proper carriers.
5. In the event of a loss, an Art Loss Report Form must be completed by the department sponsoring the exhibit and submitted with any claim to Client’s us risk management who will then forward the claim to UKGC Risk Management. The claim should include necessary valuation documentation specified in the previous section of this report.
6. Artwork which is donated to the Client should be accepted through the use of a Gift- in-Kind Transmittal Form and added to the Client’s inventory according to the estimated or appraised value.
Subject: Property Use Agreements
Each Client’s office experiences situations in which outside (non-Client) parties request to use Client-owned facilities, vehicles, or equipment. When it is in the interest of the Client’s mission to allow others to use its property, there are some risk management considerations which should be addressed. The purpose of this paper is to provide the Client’s risk managers with a consistent means of maintaining control over the assets of the Client’s entity which it lends to others.
The most effective way for the Client to maintain control over its facilities, vehicles, and equipment would be to restrict use of its property to authorized personnel only. This is not a realistic approach to property control because the Client is (may be) a State or private-owned, and part of its mission is (may be) to provide services to the various communities in which it is located. These services may include allowing community groups to use its facilities for meetings, providing transportation for Client’s events or operations to community members, or even lending some of its equipment to groups within the community.
As an alternative to restricting all use of Client’s property to Client’s personnel, control of property can be maintained through the careful screening of potential property users and the use of property use agreement forms. Common sense and the basic tenets of property law can assist the risk manager in controlling the assets of his/her Legal entity.
Although most Client’s divisions already have one or more property use agreement forms to meet their property control needs, consistent use of a officewide property use agreement according to these guidelines may simplify the overall risk management effort. When request is made of a Client department, the following steps should be taken:
1.Notice of the request should be given to the risk manager or property control person from the department. Notice should include name of borrowing group (including an individual liaison), name and value of property, reason for request of use of property, and borrowing time period.
2.Risk manager and department head should come to a cooperative agreement regarding the Client’s desire to lend the property for the requested purpose. If an agreement cannot be reached, contact The Client’s Office of Risk Management (SRM) for advice.
3.Upon reaching an agreement, the attached form should be completed by both the borrower and the lender. All pertinent information should be submitted and the form should be signed by the borrower and the Client’s lender (either the risk manager or the department head or both). A copy of the form and other pertinent information should be kept on file in the RM office.
Subject: Insurance Coverage for Employee’s Personal Property
This paper has been developed to provide Client’s employees some guidelines regarding the use of personally owned property at work and the potential for reimbursement should that property be damaged or stolen.
It has become common practice for Client’s employees to bring personal items to the work- place for a variety of reasons including enhancing their work environment or making the job easier. Theft or damage to this property by fellow employees, cleaning personnel, work related conditions, and outside parties is not unusual. These losses have resulted in a number of inquiries directed toward risk management regarding how loss of personal property might be compensable.
In general, the Client’s takes no responsibility for loss of, or damage to, personal property of employees. It is expected that these items are insured through the individuals home-owners insurance policy which is a primary source of compensation for all losses. There are, however, a number of secondary avenues that employees may take in pursuing compensation for loss of their personal property while at work. These potential sources of compensation have been outlined below. Specific questions regarding these sources and this policy, in general, should be addressed to Client’s Risk Management.
1. Personal Homeowners or Renters Policy
As stated above, the primary and most logical source of recovery for loss of personal property, whether it be at work, at home, or at other locations, is the individual’s homeowners’ or renters’ insurance policy. Most personal insurance policies provide the options of a lump sum blanket coverage for personal property or a scheduled amount for special or valuable property. These policies can usually be afforded for a $100-$250 annual premium and cover items at many locations with respect to a variety of perils. These policies may exclude property used in a business or profession, but this exclusion can be removed.
2. UKGC Self-Funded Property Program
The UKGC Self-Funded Property Program (UKGC SPP), as described in Section 2, A of this document, provides protection for losses to Client-owned or leased property. The only other type of non-owned property, which may be covered by this program is exhibited property which is covered through a special art exhibit policy.
An employee who is using personal property as an integral part of his or her job (such as a computer or special instrument) may attempt to gain coverage through the UKGCSPP either by leasing the equipment to the Client or by listing the equipment on the Client’s inventory listing. Written documentation from the department head must be procured stating that the equipment is necessary and no alternative sources of equipment exist. These techniques have been used in the past but typically only apply to items which are necessary for the performance of the job, and coverage will only apply to loss which occurs in the course of Client’s business.
When property is listed in this way, it is seen as property of the Client and losses will be reimbursed through the typical claims procedure with UKGC Risk Management. It should be noted that UKGC Risk Management will not provide reimbursement for claims where written documentation of the use agreement does not exist or where property is being used to meet personal needs.
Finally, a $500 deductible applies to most property losses with a $2500 deductible for those theft losses which occur with no sign of forced exit, entry, or removal. This deductible will be paid by the department where the loss occurred.
3. UKGC Claims Board
The UKGC Claims Board is a mechanism for reimbursement of claims based on legal liability, negligence, or on principles of equity that the UKGC should in good conscience pay. Claims settlement through the claims board is based on the dollar amount. Claims less than $1,000 may be paid through a majority vote of the board. Claims which are greater than $1,000 are submitted to the legislature.
In settling the claim, the claims board will most often designate a specific fund to which the claim is chargeable. Quite often, claim settlements end up being charged back to the department from which the loss originated or at least back to the Client’s office of origination. For this reason, a great deal of time, paper, and ultimately money may be saved by petitioning directly to the department for reimbursement.
4. Departmental Funds
As part of the Compensation Plan and Financial Policy and Procedure Paper (FPPP), the Client may reimburse its employees for the cost of repairing or replacing personal property of employees. This paper was initially developed to apply to clothing, watches, and eyeglasses where damage is not caused by the employee’s carelessness or simple wear and tear. Coverage has been extended to other personal articles which are lost or damaged in the course of work.
Compensation under this policy is contingent upon the approval of the departmental head, who has the final authority for such payments. Reimbursement should be obtained through the use of a travel voucher and is limited to a maximum of $300 with a $75 limit on watches.
Claims for less than $5 will not be reimbursed.
5. UKGC Self-Funded Liability Program
A final source of recovery for an employee for lost or stolen property is through the UKGC Self-Funded Liability Program. Under this program an employee, as a third party claimant, must file a claim against the Client for loss. In order to successfully charge the Client through this venue, negligence must be proven on the part of an employee, officer, or agent of the Client. This negligence, or failure to act prudently, must be the proximate cause of the loss.
The details on filing a liability claim are included in the System Risk Management Manual under the UKGC Self-Funded Liability Program and are available from Client’s risk manager.
