SUBJECT: Staff Organizations and Risk Management
These guidelines have been developed to clarify the extent to which the UKGC Self-Funded Liability Program (UKGCSLP) applies to the activities and functions of Staff Organizations within the Client’s Legal Entity. In addition, procedures for the evaluation of the organization’s activities with respect to liability protection as well as for the procurement of outside sources of liability insurance will be discussed. This evaluation will also assist Client’s administrators in the approval of Staff organization’s use of Client-owned vehicles, facilities and services provided. While these guidelines should provide clarification, the final decision for liability protection ultimately rests with the Attorney General and will depend upon the situation in which loss occurred.
Note: All highlighted words have been defined in the appendix of this document.
Staff organizations have been a topic of concern from a liability perspective for Client’s administrators for many years. Involvement in a wide variety of activities ranging from sky diving to elderly care results in a severe liability exposure for Staff Organizations and the Client. Claims for negligent acts or omissions resulting in personal injury or property damage to others and which result from the activities of that organization, may be imposed on the individuals involved, the Staff organization, branch and staff advisors, and the Client Legal Entity, depending on the circumstances.
Client’s Administrators would like to be able to approach these loss exposures pro-actively by providing the Staff organizations with a way to evaluate the level of liability protection that the organization members have via the UKGCSLP fund and their potential need for commercial liability insurance. Of extreme importance is the consistent and continual education of faculty, staff and students about their potential liability exposures, the limitations in liability coverage through the UKGCSLP, and the evaluation of their need for outside coverage.
It is not the role of the risk management office on Client’s Legal Entity to determine the legitimacy of Staff organization activities, but rather to evaluate and manage, in cooperation with division, staff, the liability exposures which Staff Organization activities may create.
Because liability protection extended to individual employees, officers, and agents, is not absolute it is impossible to determine whether liability protection will exist for individuals involved in a given specific Staff organization activity. In determining the potential for coverage, the first step is to determine whether the individual involved are Client’s agents. Often it is quite difficult to determine whether an individual agent will be covered for liability without knowing the details of the specific situations from which the liability may arise. Liability protection will be judged based on the specific activities of the individuals. Therefore, Staff organizations should not assume continuous and automatic liability protection by virtue of their existence.
Key factors in determining the liability protection in a given situation are the Client’s Legal Entity mission, the level of benefit and control that exists between the organization and the Client, and the agency status of individuals involved.
1. Client’s Legal Entity Mission:
Each Client’s institution operates under the Client’s Legal Entity Mission, a Core Mission, and a Select Main Direction of such Mission. These mission statements set forth the broad purpose and scope of the Client’s System and its institutions, providing philosophical and management direction to each. They also imply the broad relationship between the pure business pursuits of the Legal Entity and the extracurricular activities provided.
For example, some Point has a specialized degree in forestry and also provides a variety of forestry-related extracurricular Staff activities. Because the mission statement refers directly to Natural Resource Management programs, the Directors, and staff, can see a direct link between various forestry extracurricular activities and the overall Client’s mission. The strength of such links may be a critical factor in determining whether liability protection exists.
2. Benefit and Control:
In general, for liability protection to exist there must be direct relationship between the purpose of the organization and the activity. For an activity of a Staff organization to show benefit to the Client, it must fall within the stated Mission of the Client. For example, benefits to the Client may be economic in nature or may enhance the community outreach goals of the institution as well as enhancing the professional level and Staff development goals of the Client’s institutions. If the activity is for the exclusive benefit of an organization outside of the Client’s Legal Entity, then the individuals probably will not fall within the scope of liability protection.
In addition, some level of control by the Client over the activities of the organization must be evident. If the Client maintains some degree of control over the activities that take place, then it is more appropriate to argue that liability protection exists for certain individuals in the organization. Controls which the Client might have over a Staff Organization include but are not limited to:
1. Officially recognized by the institution.
2. Eligible for Segregated Client’s Fees (SCF).
3. Statement of mission/charter.
4. Designated faculty/staff advisor.
5. Conformance with Client’s, Municipal, and State laws.
Each Client runs a volunteer experience program in which Staff perform volunteer services for organizations. Liability protection for such functions may work a number of ways as the responsibility for the function may rest with the entity our Staff organization is assisting, the Client’s SLP, or a combination of the two. Again, the events of the situation will determine the Client’s responsibility.
3. Agency Status:
Liability protection is afforded through the UKGCSLP for officers, employees, and agents of the State while acting within the scope of their employment or agency. Although it may be a simple matter to determine who officers and employees of the State are, it is less clear who is considered an agent of the State. While the use of documentation may help the organization to clarify the status of its members, the ultimate determination of agency is based on a case by case analysis. Examples of helpful documentation include but not limited to: letters of invitation, planning documents, proposals, organizational charters and bylaws.
Agency status does not guarantee liability protection. Membership in a Staff organization does not guarantee agency status. Liability protection will only be afforded to those agents who are operating within the scope of their duties as agents. This reinforces the need for a Staff organization to specify in writing what its activities generally are and what responsibilities exist for the members of the organization who feel that they might be Client’s agents.
Faculty and staff advisors who have been appointed as such are provided liability protection for their actions when acting in the scope of their employment or agency. Ideally, the appointment should be included as part of an employee’s written position description, or at a minimum, the appointment should be in writing. Faculty and staff advisors should be active when working and advising Staff organizations. They should take responsibility for questioning activities of a Staff organization and voice disagreement if they see a problem with a proposed event. These actions are within their scope of employment. They must feel comfortable when questioning a Staff activity as that event or activity may have an impact on the Client’s liability coverage.
1. Risk Control:
The liability exposure the Client’s faces for those activities, which are linked through the mission of the Client or the level of benefit and control can be minimized by the following:
1. Transferring risk through third-party waivers, hold-harmless agreements, or through vendor contracting (especially applicable to rental vehicles).
2. Transferring risk through personal liability, health, travel, and life insurance.
3. Preventing/controlling risk through training and supervision.
4. Retaining the risk through choice of only those activities that are low risk.
2. Risk Financing:
1. UKGCSLP Coverage:
When all the following conditions are met, liability protection by the UKGCSLP is highly probable to those agents (members of Staff organization) who are operating within the scope of their agency.
1. Meets the Client’s mission;
2. Follows Client’s established rules and regulations;
3. And, a staff advisor is actively involved with the Staff organization.
2. Outside Coverage
When a organizational activity does not meet these requirements, the organization is required to sign hold-harmless and indemnification clauses. If the Staff Organization sees a need for extending liability protection to all members regardless of agency status, outside insurance protection must be considered in order to protect the organization and its members.
3. Specific events that do not benefit the Client’s mission, such as a pub tour, is an example of where the UKGCSLP will not respond. The organization participating in such events will need to secure a special-event liability policy for Staff organization activities. This policy is normally priced on a per-event basis since each event is separately underwritten. Consulting with a local insurance agent to purchase coverage for the event may aid in receiving a competitive price for the coverage. If insurance coverage can not be purchased, the Staff organization may want to weigh the merits of hosting the event as the members may become personally liable for any wrong doing.
In order for the Client to recognize an event the following list of insurance policy conditions must be met.
1. Named Insured: The Staff Organization or specific member.
2. Additional Insured: Client’s Board of Directors (Regents), its officers, employees and agents.
3. Coverage Detail: Commercial General Liability coverage for bodily injury or property damage caused by the Staff organization members to third parties during the course of the event.
4. Policy Minimums: $500,000 limit per occurrence. $500 Medical Payments optional.
When an organization seeks coverage under this format, a certificate of insurance must be submitted to the Client’s risk manager well in advance of the event which shows the above conditions have been met and the following information must be included:
1. Dates of the event;
2. Description of the event;
3. State the policy limits;
4. And special insurance requirements imposed by outside parties (such as limits or additional insured provisions).
