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E Risk Management
E-1 Introduction
Based on several professional, legal, financial, and ethical/humanitarian grounds, American University of Sharjah exerts substantial efforts to ensure the health and safety of every party that is directly or indirectly related to any environment that involves the operations of the University. Those efforts are being carried out with the intention of protecting the University’s resources from damages incurred that may affect the expected quality standards of education, research and public service offered at American University of Sharjah. As we strive to provide a comprehensively safe environment, Risk Management will evaluate several types of risks. These include, but are not limited to, natural risks, environmental risks, compliance/legal risks, economic/business risks, social risks, and technological risks.
E-2 Definition
Risk Management is the science of understanding, distinguishing, and containing the potential losses or injuries within and related to the working environment of the entity in question (i.e. American University of Sharjah). Insurance Management, on the other hand, is concerned with the identification of potential losses and reducing those by the use of insurance.
In order to simplify the principles of risk management some other terms need defining.
- Risk: One definition of risk is the possibility of an occurrence of an event that may or may not result in adverse/unfavorable results.
- Peril: This is the potential event that my cause the negative outcome.
- Hazard: This is a condition that increases the possibility for a peril to take place.
E-3 Objective
At the American University of Sharjah, many departments and colleges are facing the possibility of perils taking place. Examples are fire, work-related injuries and data loss. Consequently, applying risk and insurance management is essential to keep the operations of the University running smoothly and effectively.
E-4 Plan for Action
One of the duties of risk management at the American University of Sharjah is to design and implement a strategy to contain and decrease the risks involving the University.
Departments and employees are encouraged to contact the Insurance/Risk Management Department, Operations Department, Facilities Department, Health Clinic, Security Services, or the Human Resources Department for assistance. They can be guided through a process to manage the different risks effectively and to design an operational loss prevention program. The process involves:
- Identifying and evaluating the risk.
- Estimating the possibility of losses to be incurred as a result of the risk.
- Choosing the optimum system to handle the risk.
- Applying a plan to implement the selected system.
There are different types of losses and risks. The ones that are most concerning to many departments are mainly the risks to people and property. Some examples of these are:
- Destruction: Property may be destroyed by fire, earthquake, breakage or deterioration.
- Usage: When a building/equipment is destroyed, it is also unusable. This might result in handicapping the operations of the respective department. For example, if a virus hits the computers of the Human Resources Department, the loss of data could result in the inability of that department to operate until that data is restored.
- Negligence: This is the loss incurred as a result of ill-trained use of an equipment or irresponsible behavior (e.g. reckless driving of buses)
- Goodwill risk: This is the risk generated as a result of unethical, harassing, and unfair dealings that might cause liability situations and negative public opinion regarding the University.
E-5 Methods for Reducing Risks
Some risks have to be accepted as there are no insurance products to cover those risks or that the available insurance products’ cost is not financially viable. Therefore, some risks may need to be assumed or accepted. Examples of these could be war, flood, or wear and tear…etc. The financial value of the risks is compared relative to the size of the operation, and the possibility and seriousness of the potential loss, and the effects this loss may have on other operations of the American University of Sharjah.
- Risk Transfer to Insurance Carriers or others
In several situations, American University of Sharjah may be in a position to enter into a contract with an outside party with the intention of reducing risk. This contract will be executed by the Vice Chancellor for Finance & Administration or the Director of Operations.
E-6 Policies regarding Insurance/Risk Management programs
The American University of Sharjah faces several types of risks during its various departments’ operations. Realizing the necessity and the responsibility to preserve our resources, Insurance/Risk Management policy and guidelines have been prepared.
- Accomplishing and keeping a low cost of risk without placing American University of Sharjah in a situation that could jeopardize its financial security.
- All risks that may or may not need insurance are to be evaluated and analyzed from the department’s and the University’s view.
- Activities and practices that are most likely to produce losses are to be re-structured, modified, or eliminated.
- Risks are to be taken/assumed/accepted when the potential loss would not significantly affect the University’s financial situation.
Limit would be used to better understand what makes a considerable loss; AED 5 Million in any single occurrence of a loss or AED 20 million over the whole year.
Exceptions to this policy are:
- When it is required by law or contractual agreements to use/buy insurance.
- When purchasing insurance coverage makes more economic sense, considering the probability of risk and the cost of insurance.
- Risks should be insured whenever the possible risks are considerable.
Exceptions for this are:
- When the desired insurance is not available for purchase at any cost.
- When purchasing insurance, compared with the risk, does not make financial/economic sense.
- When analysis and recommendations that the risk involved does not require insurance.
E-7 Responsibilities of Risk Management Department
- Designing and implementing programs for risk management/identification, measurement, valuation, and claims control.
- Creating limits of coverage to preserve the University resources and deciding on which risks to be insured and accepted/taken.
- Deciding on how to fund the risks.
- Analyzing, acquiring and managing all University insurance related to buildings, workers compensation, injuries, athletic programs, travel accidents…etc.
- Working with the Human Resources Department for the management and acquisition of employee benefits insurance programs.
- Working with the legal representatives of American University of Sharjah and the insurance companies to negotiate, adjust and settle any insured loss.
- Maintaining insurance and risk records.
E-8 Insurance Programs offered by the American University of Sharjah
Buildings and contents insurance programs cover the damage that could take place due to fire, smoke, sandstorms, explosion...etc.
- University-Owned Vehicles’ Insurance
Vehicles owned by American University of Sharjah are fully covered in this program. These vehicles include mini-buses, cars and pick-up vehicles.
This program covers workers’ medical expenses for on the job injuries.
This program covers the health related expenses of employees, life insurance, retirement, and short and long term disability among others.
E-9 Insurance Payments
Department specific insurance coverage will be billed to their respective accounts. Those departments requesting special insurances will contact the Risk Management Departments for more details.
E-10 Post-Accident Procedures
In the unfortunate event of an accident, the injured party must report first to medical services. Secondly, the person involved in an accident must contact the Risk Management office as soon as possible. In cases where the accident takes place off-campus, those having the accident must also contact the local police.
E-11 How to Process a Claim
When an employee of American University of Sharjah or a department/college needs to process a claim, they should contact the Risk Management office which will act on their behalf to process the claim. This applies to claims for fire, liability, university-owned vehicles, or injuries.
E-12 Properties Not Insured by the University
Private properties owned by the students, faculty members, staff members, or other parties are not insured by American University of Sharjah.
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