05.02 - Property Coverage
July 28, 2010 (rewrite)
A-1. Boiler and Machinery covers losses arising from: an explosion of a steam boiler, steam turbine, steam piping or steam engine; mechanical breakdown or failure; or electrical injury. Boiler and Machinery coverage is reported annually using data from the property schedule.
A-2. Building is a structure or an improvement such as a barn, pump house, research lab, classroom, or office facility, etc. Outdoor structures such as bleachers, electronic message or score boards, large signs, etc. are included in this category.
A-3. Builders Risk is coverage designed to cover property in the course of construction. Coverage is usually written on an all-risk basis, and generally includes materials on-site but not yet installed. The estimated completed value of the project is typically used as the limit of insurance.
A-4. Business Interruption is coverage for loss of income suffered by a business when a covered loss causes damage to its premises and results in a slowdown or suspension of its operations during the time required to repair or replace the damaged property.
A-5. Contents is business property such as office furniture, equipment, computers, non-motorized Mobile Equipment, and other property not permanently attached to a Building. Property permanently attached to a Building such as HVAC equipment is considered part of the Building value. Outdoor structures such as bleachers, electronic message or score boards, large signs, etc. are not considered Contents.
A-6. COPE Form is used for reporting newly acquired property. The abbreviation, COPE, stands for Construction, Occupancy, Protection, and Exposures and is an industry standard form.
A-7. Draft is the draft property spreadsheet of the annual statement of property values that has the Contents and Mobile Equipment values supplied by Asset Accounting and all changes that Risk has received during the year.
A-8. Extra Expense is the expenses incurred after a loss that would not have been incurred during normal operations. Examples of Extra Expense include the cost for obtaining a temporary location or setting up equipment at the temporary location.
A-9. Facilities is the University of Idaho Facilities Services.
A-10. Fine Art is coverage for items owned by another party that are on exhibit temporarily in a University facility or that the University owns and is temporarily loaning out for an exhibit. University owned art is covered in the Contents figures for a Building. Coverage for art on exhibit at the University must be requested through the Risk by providing a completed worksheet that contains specifics about the item.
A-11. IDRMIS is the Idaho Risk Management Information System. IDRMIS is a web-based program administered and maintained by the State of Idaho.
A-12. Inland Marine is coverage for equipment and business property valued under $2,000 that are moveable in nature (i.e., laptop, power tools, music instruments, or GPS units). Coverage must be requested through Risk by providing a completed worksheet that contains specifics about the item. See APM 05.03 for more information.
A-13. Mobile Equipment is anything motorized and not licensed for road use, such as road building machinery, ATV’s, off-road motorcycles, riding lawn mowers, golf carts, tractors, etc. Mobile equipment values are actual cash values.
A-14. Real Property is land, including improvements. The University’s property coverage does not cover land. Property coverage only covers Buildings and Contents.
A-15. Rental Income is coverage that pays for the loss of rental income resulting directly from loss or damage by a covered event when property is rendered wholly or partially unusable.
A-16. Risk is the University of Idaho’s Risk Management Office.
A-17. State RMP is the State of Idaho Risk Management Program.
A-18. Stock and Supplies is property such as paper, pencils, office supplies, goods for sale, etc.
A-19. Tuition or Fees is coverage for the loss of income from tuition or fees should a loss occur and the University be unable to operate.
A-20. Unit refers to primary management units within the University, including recognized colleges, administrative centers, such as the Division of Finance and Administration, or the Research Office, and recognized University Centers located remote from the main campus, such as Idaho Falls.
A-21. University is the University of Idaho.
B. Policy. The University participates in the State RMP for property coverage. Units may not make any separate arrangements for property insurance. Property coverage includes: Buildings, Contents, Mobile Equipment, Stock and Supplies, Business Interruption, Rental Income, Extra Expense, Tuition or Fees, Builders Risk, and Fine Art for which the State has an insurable interest or for which the State has assumed responsibility in writing. The property policy has a $2,000 deductible for covered events. Losses arising from: an explosion of a steam boiler, steam turbine, steam piping or steam engine; mechanical breakdown or failure; or electrical injury will be adjudicated through Boiler and Machinery coverage with a $5,000 deductible. Employees who use personally-owned equipment at work should consult with Risk. In order to participate in property coverage, the University must report through the IDRMIS. Risk inputs coverage data into the IDRMIS. Typically the State RMP requests the information and/or confirmation of data during spring for the July renewal of the property policy.
B-1. Building, Contents, Mobile Equipment, and Stock and Supplies. Units must report this information to Risk as changes occur. Follow steps in section C or D as applicable. Units must verify property values during the renewal process annually. Follow steps in section E.
B-2. Fine Art. Fine Art values are captured through the Contents figures obtained from Asset Accounting.
Fine Art not owned by the University can be covered by the State RMP if a contractual agreement obligates the University to cover the piece(s) while it is in the University’s care, custody, or control. Coverage can be arranged by completing a Fine Art Insurance Request form. Return the Fine Art Insurance Request form to Risk at Risk Email or fax to 885-9490.
B-3. Builders Risk. Coverage is not always automatic. Project managers (Facilities/other Units as appropriate) must consult with Risk about larger construction projects. During the planning phase of these projects, involve Risk if any of the following apply:
(i) any new “ground up” projects, regardless of project value;
(ii) renovations or additions in excess of $5,000,000; and
(iii) renovations/additions that increase the existing Building’s square footage by more than 50%. Units are responsible for completing and forwarding the Builders’ Risk Application to Risk. Typically, the State RMP is able to include projects valued at less than $15,000,000 on the property policy. The State RMP will seek alternate coverage for projects valued at more than $15,000,000. It is important to consult with Risk during the planning phase of construction projects in order to provide enough time for the Unit to complete the application and for Risk and the State RMP to work on coverage. If Risk and the State RMP are not consulted in a timely manner, it could jeopardize the start date of the project.
B-4. Business Interruption, Rental Income, and Extra Expense. As the situation occurs, income generating Units need to request coverage for any new location or existing operation that have changed locations by completing the Business Interruption Loss and Rental Income form and returning it to Risk at Risk Email or faxing it to 885-9490. Units need to annually report to Risk any data on Business Interruption, Rental Income, and Extra Expense, see section F.
C. Addition of New Location. The Unit is responsible for reporting to Risk all newly acquired real property or new leased locations by completing a COPE form. Policies regarding real property transactions, including purchase, sale, lease, easement, or exchange can be found in APM 61.62.
Return the COPE form to Risk at Risk Email or fax to 885-9490.
D. Changes to Existing Location.
D-1. Additions to Existing Location. The Unit is responsible for reporting to Risk all
(i) newly acquired Contents valued over $2,000,
(ii) newly purchased or changes in location for Mobile Equipment,
(iii) changes in Stock and Supplies of more than $500, and
(iv) changes in retail locations that are temporary or have moved, by completing the Property Value Adjustment form.
Return the Property Value Adjustment form to Risk at Risk Email or fax to 885-9490.
D-2. Deletions to Existing Location. The Unit is responsible for reporting to Risk any
(i) divested Real Property,
(ii) Building demolition,
(iii) Building move,
(iv) lease termination,
(v) sale or destruction of Contents valued over $2,000,
(vi) sale of Mobile Equipment, (vii) changes in Stock and Supplies of more than $500, and
(viii) changes in retail locations that are temporary or have moved, by completing the Property Value Adjustment form.
Return the Property Value Adjustment form to Risk at Risk Email or fax to 885-9490.
E. Annual Renewal Property. Risk prepares and circulates the Draft to Units responsible for providing information regarding Buildings, Contents, Mobile Equipment, and Stock and Supplies. Changes to the values listed in the Draft need to be done by completing the Property Value Adjustment form. Units need to ensure all new Buildings and locations in which the University has operations and equipment appear on the Draft, as well as freestanding improvements such as extensive fencing, bleachers, scoreboards, astro turf, electronic signs, etc.
Multi-Unit Structures: Each Unit within a Building reports its own values separately. Risk will add the values from the different Units to obtain a final figure.
Changes to the Draft need to be done by completing the PROPERTY VALUE ADJUSTMENT FORM.
E-1. Units receiving the Draft should do the following:
a. Add a Building or Location. Follow steps in section C if a Building or location does not appear on the Draft.
b. Increase or Decrease Building Value. Review existing Building values that have been carried forward with an appreciation factor from the prior year. Building values should be increased if a remodel or addition increases the value.
c. Removing a Building or Location. Report Buildings that need to be removed from the Draft because they were removed, demolished, sold, or a facilities use agreement or lease has terminated.
d. Contents. Review for accuracy the value for Contents listed for Buildings that the Unit controls. These values have been supplied from Asset Accounting and should be reviewed for any changes.
e. Mobile Equipment. Review for accuracy the value for Mobile Equipment listed for Buildings that the Unit controls. These values have been supplied from Asset Accounting and should be reviewed for any changes.
f. Stock and Supplies. Review for accuracy the value of all Stock and Supply items. These values have been carried forward from the prior year and may have changed or may not have been previously listed. The value should be an estimate of an average monthly value for Stock and Supplies.
g. Return the completed Property Value Adjustment form, or COPE form, to Risk at Risk Email or fax to 885-9490. If the Unit has no changes to the Draft, email email@example.com that the Unit has no changes for the Unit’s area of responsibility.
F. Annual Renewal for Business Interruption and Rental Income. Units will need to provide details for any income generating operation, listing figures per Building on the Business Interruption and Rental Income spreadsheet provided from Risk. Provided figures should include:
(i) net profit after all expenses from production or service operation;
(ii) rental income;
(iii) cost of salaries and benefits of all executives, officers, deans, unit managers and heads, full-time faculty, and coaches and employees under contract that would not be discharged in the event of a loss;
(iv) cost of bonded debts;
(v) cost of all non-cancellable contracts (i.e., rent, utilities, other services, etc.); and
(vi) any budgetary changes that will occur during the year. Units can participate in this coverage by completing the Business Interruption Loss and Rental Income form and returning it to Risk at Risk Email or by faxing it to 885-9490.
G. Claims. A property claim would be for covered damages to University Buildings, Contents (including equipment valued over $2,000 and owned Fine Art), Mobile Equipment, Stock and Supplies and Business Interruption. Call Risk within 24 hours to report any water event and any possible claim that could be over $2,000. Prompt reporting allows Risk to assist with remediation, and allows time for an independent adjustor to do a review, if necessary. Damages that are under $2,000 can be reported within 90 days to Risk by completing a property reporting form.
Risk will work with Facilities and/or the independent contractors to get bids for repairs to a Building. The Unit will work with Facilities and/or the independent contractors to schedule the repairs and make the area accessible. Within two weeks after the initial report of the incident, the Unit will need to supply to Risk any invoices for the replacement of Contents that were damaged or two estimates for the repair or future replacement of the Contents.
Risk will alert the State RMP that there is a possible claim by supplying them with details of the incident. The State RMP will determine if an independent adjustor is needed to review the damages.
Risk will collect costs from Facilities for
(i) materials and/or the independent contractor’s invoice for the job performed,
(ii) the two estimates for replacement or repair, or
(iii) the invoice for the replacement of any Contents, and any Stock and Supplies replacement cost documents to present a final claim to State RMP for the recovery of damages. The State RMP will adjudicate the claim and make payment if the damages are from a covered event.
The payment from State RMP will reflect the $2,000 deductible for a property claim. When the check is received from State RMP, Risk will deposit it into the insurance reimbursement account and will request from the Unit the budget number to which the Unit would like the funds to be cost transferred. Risk will request a cost transfer from General Accounting for the amount of reimbursement.
H. Contact Information. For any questions regarding the coverage for property, Business Interruption or property claims, please contact Risk at (208) 885-7177, or Risk Email.
I. Further Instructions; Forms and Examples. For further instructions on procedures, please visit: Risk Management: Property Coverage.