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Policy Contact: Office of Finance and Budget

1. Purpose

   This policy and its procedures set forth University protocols for risk management with University-coverage of losses of personal property owned by the University, not subject to University Policy 8:8, and not otherwise covered by State of South Dakota insurance or the Public Entity Pool for Liability (PEPL) Fund.

2. Definitions
    
   1. Insurance: a practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium.
       
   2. Loss: a reduction in University-owned asset or property value or damage of said University-owned asset or property due to an accident, natural disaster, or other risk.
       
3. Policy
    
   1. University Insurance coverage may only be procured by the State of South Dakota Office of Risk Management or, as allowed by law, upon approval by the University President, upon consideration of the recommendations of the VP for Finance and Budget and the University Risk Management Coordinator.
       
   2. A Risk Management Fund, based on an analysis of estimated anticipated uncovered Losses and as approved and determined by the University President, will be maintained centrally in the Division of Finance and Budget to cover costs incurred for Losses not covered by authorized Insurance, PEPL fund, federal coverages, or Losses covered by University Policy 8:8.
       
   3. The Risk Management Fund will not be used for:
      1. Losses covered by authorized Insurance and their associated deductibles, State of South Dakota PEPL Fund, South Dakota Fleet coverages, workers' compensation, unemployment compensation, disability benefits, federal coverages, or other laws, personal injuries, wages, or intentional and willful or wanton misconduct.
      2. Losses to property that will no longer be used by the University.
      3. Losses determined not to be a reasonable business interest of the University to cover by the Risk Management Coordinator, the VP for Finance and Budget, and/or the University President.
          
   4. Any Risk Management Funds allocated to cover a qualifying Loss must be used for replacement of the Loss and not redirected to other uses.
       
   5. Covered requests for Losses from the Risk Management Fund under $50,000 may be eligible for expedited approval.
       
   6. The VP for Finance and Budget and the Risk Management Coordinator, or their successors will provide a report for the University budget process to the Risk Management Committee, University General Counsel, and the University President on or about August 1 of each fiscal year on the action(s) receiving support from the Risk Management Fund in the immediate previous fiscal year. 
       
   7. Individuals requesting coverage under the Risk Management Fund are expected to cooperate with the University in the approvals or denials of requests, as well as any Insurance or PEPL coverages, settlements, or litigation.
       
4. Procedures
    
   1. To request consideration for coverage of Losses not covered by authorized Insurance, the PEPL Fund, or under University Policy 8:8 from the Risk Management Fund, the department or individual must first file a Report of Accident, Incident, or Unsafe Condition with the Office of Risk Management, following the instructions on the form.
       
   2. The Risk Management Coordinator, or successor, will review the report and communicate with the submitter and others to ensure all facts are gathered and that the Loss is not covered by another program or Insurance policy.
       
   3. An invoice or estimate for replacement or equivalent documentation is required to submit a request for coverage.
       
   4. If the Loss appears eligible for consideration of coverage from the Risk Management Fund, the Risk Management Coordinator will obtain the approval of the applicable department or individual's supervisor, dean, director, assistant dean, and/or vice president and forward this information to the VP for Finance and Budget for consideration. The VP for Finance and Budget will seek approval of the University President for coverage of Losses over $50,000.
       
   5. Requests for eligible Losses recommended for coverage pursuant to section 4.b. that are $50,000 or under may be approved by the VP for Finance and Budget.
       

5. Responsible Administrator

   The Vice President for Finance and Budget, or designee, is responsible for annual and ad hoc review of this policy and annual review of procedures. The University President is responsible for approval of this policy.

Approved by President on 02/02/2025.

Sources: University Policy 8:8