Insurance cover held by the University
Introduction
Due to the diverse range of commercial and other activities carried out by the University, questions often arise about whether the current insurance arrangements are adequate to cover the University in the event of loss or damage occurring as a result of a proposed project or activity. RMIT has a variety of insurance policies in place to protect itself against significant losses arising from specified events. In an attempt to reduce the high cost of insurance premiums, the University's policies contain conditions, exclusions, limits of liability and deductibles (commonly known as excesses).
The purpose of this paper is to advise you generally about the types of insurance that the University has in place to help you recognise a situation where you may be able to make a claim, or where insurance-related issues should be considered in contracts or agreements you are negotiating.
Where matters of insurance arise, you should contact the University's Insurance Officer,
Mr Warren Grant, to ensure that adequate cover is in place or can be arranged. The Legal Office will often forward copies of contracts and agreements to Warren to make sure that the activities being contemplated by the agreement (eg. the purchase of equipment, student placement programs, research to be carried out by way of consultacy or group projects) are within the scope of the insurance arrangements currently in place. If they are not, Warren can advise whether, and what type of, additional insurance coverage should be obtained.
The policies in place cover the University's related organisations such as the RMIT companies and other entities in which the University has a controlling interest to the extent that those bodies are engaged in carrying on the business of the University. The policies protect the University against loss and damage, not individuals personally (although most policies are expressed to extend to acts carried out by employees and officers whilst undertaking University business).
In 1990, Council formalised its position in this regard by issuing a Statement of Intent which states that Council will indemnify and give any other reasonable support to officers and staff of the University in respect of any claim arising from anything done by individuals in the course of their duties. The Statement specifically notes that the indemnity will not operate where the claim has been caused by the dishonest or criminal acts of the individual seeking to rely on the indemnity. You should be aware that the insurer is not obliged to indemnify the University for loss or damage caused or exacerbated by the University's failure to do all things reasonably necessary to minimise, avoid or diminish any insurable loss, and it is important that when a covered event takes place, the University's Insurance Officer is contacted immediately so he can advise on any steps which should be taken to mitigate the loss, and commence the claims procedure as soon as possible. Failure to notify the insurer immediately of any situation which may give rise to a claim may void the insurer's liability to make payment under any policy.
Types of cover held by the University
Briefly, the types of coverage the University has in place are listed below:
1. Industrial special risks insurance
The University's insurance covers damage to and loss of all personal property and buildings belonging to the University or for which the University is responsible to insure, including property owned by other parties under the University's control. Property is insured for replacement value rather than its mere market value at the time of loss.
Goods:
- owned, hired, leased, rented or loaned or used by the University; or
- for which the University has assumed responsibility; or
- in which the University has an insurable interest; or
- for which the University has received instructions to insure,
are covered by the insurance policy provided that the interest is disclosed in the business records of the University and the nature and extent of the interest has been disclosed to the insurer at the time of notification of the claim. Cost centres should ensure that all assets owned by the University are properly noted in the University's Assets Register (see RMIT Operating Procedures - Finance, Procedure 3.17). Inclusion in the Assets Register is evidence to our insurers of the University's responsibility for the item. The University's Insurance Officer should be advised by cost centres of any purchases in excess of $100,000 to ensure that the cover in place in adequate. The policy recognises that the University is constantly purchasing new equipment and routine purchases are covered under the policy without the need for notification. Losses caused by theft should be reported to the University Campus Security Officer and to RMIT's Insurance Officer immediately. Special Risk cover also provides protection against loss resulting from the interruption of or interference with the University's business caused by prior damage to property.
2. Liability policies
- Public Risk
The University is insured against legal liability to pay damages or compensation in respect of injury to any person and damage to property caused in connection with the University's business. Legal costs and other professional costs related to such a claim are also recoverable.
- Professional Indemnity
This policy covers loss and damage arising from any breach of professional duty by an employee, principal, director or officer of the University and its companies in the conduct of any activities that the University carries out or is likely to carry out. The cover also extends to acts undertaken in respect of any appointments held by individuals relating to University business. If any claim is made in these circumstances, the insurers are obliged to pay the costs and expenses of defending or settling such a claim.
Claims arising from students on practical placement, community placement, enterprise experience or other work experience programs or training activities are also covered. The University is not covered under this heading for claims arising from fraudulent, dishonest or criminal conduct nor does the indemnity extend to claims arising out of any activities in which the insured is engaged as a joint venturer or partner (ie; a commercial enterprise carried on in common by the University and a third party) unless such liability arises directly out of acts, errors or omissions of the University. Departments and faculties involved in such projects should make special insurance arrangements to cover the activities of parties acting as joint venturers.
- Directors and Officers Liability
Directors and Officers cover indemnifies the University from claims made against directors and officers in carrying out the duties of the relevant office. Again, the indemnity does not extend to dishonest acts or conduct of the officer arising from the improper use by the person of their position. The insurance covers acts undertaken by officers in their position of directors of outside companies (eg. RMIT Innovation Ltd, RMIT Training Pty Ltd ) where those acts are carried out on behalf of the University.
3. Personal accident-travel
Staff members are automatically covered for accidental injury occurring whilst on overseas business trips undertaken primarily for business purposes (associated holiday travel is included). The insurance covers medical and/or necessary repatriation expenses following injury or illness and loss of baggage and related items. Trips in excess of 9 months duration, or overseas postings (ie; representing the University in one place) of more than two months are excluded from cover, and special arrangements must be made for such overseas assignments.
4. Public liability – hirers of facilities
The University is not responsible for claims arising out of the activities of any non-RMIT Organisation whilst on or using the University’s facilities. It is therefore necessary that any University officer arranging for the use of RMIT facilities by a non-University group ensures that prior to any such activity, evidence that the other party holds public liability insurance cover be produced. The University has cover in place for use where the hiring party cannot produce evidence of its own insurance. Any premium cost should be added to any other charge for the use of the University’s facilities. Details of the premium to be charged can be obtained from the University’s Insurance Officer.
5. Student practical placement
This cover applies to higher education students while engaged on a practical placement that is an integral part of the student's program. The policies protect the University in the event of a claim from the student (as a result of bodily injury suffered while engaged in practical placement activities or during travel to or from such activities) or in the event of a claim by a third party (eg. host organisation) resulting from bodily injury or property damage arising out of the student's participation on the placement program. Students who receive payment from a host organisation will be deemed to be employees of the host organisation and are covered under the host organisation's WorkCover policy. Additionally, TAFE, (VET) students must enter into the OTFE agreement as approved by the University's underwriters. Under that agreement, TAFE students are covered by state Workcover legislation. Copies of the agreement which must be signed (no other version of the agreement should be used) are available from Warren Grant. The University's Insurance Officer should be advised immediately of any injury or damage occurring during a placement. Students are also covered under the University's policies when away from the University campus on University related activities. Other policies in place cover aviation and marine-related activities, WorkCover and motor vehicle claims.
International activities of the University
The University's insurance cover takes into account the various offshore activities carried out by the University. Many of the policies referred to above apply to the University's activities as carried out anywhere in the world. For example, public andproducts liability coverage extends worldwide except in relation to product liability in the USA. The University's Insurance Officer should be contacted to ensure that adequate insurance is in place whenever offshore activities are involved in a proposed project.
Summary
The University has significant assets which must be protected. It is no less exposed to legal liability than any other corporation. For these reasons it is important to ensure that at all times the University's assets are protected against loss and that the University is protected against legal liability where possible by appropriate insurances. Whilst the University has extensive insurance cover, University personnel should, when undertaking a particular project, always satisfy themselves that adequate insurances are in place to cover liabilities which may arise as a result of that project. Queries relating to insurance matters should be directed to Amanda Way or John Lambrick at the Legal Office, or to Warren Grant, the University's Insurance Officer.
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