So you make a risk-management decision
and a business decision: Do you want to
really self-insure that risk within your own
program because that vendor is the only
one you can go to? That’s a very big decision
when we do have to self-insure risks that are
really not ours and should be transferred to a
third party. In some instances, we do retain
that risk; in other instances, we do go out and
look for a different vendor.
And are you compelled to buy a lot of Political
Risk coverage for the international campuses?
At this point our campuses are in countries
that are stable, have stable governments,
use currencies that are stable at this
particular instant in time, so the need for
Political Risk coverage is very small. We
constantly are monitoring, though, the
worldscape in terms of the politics of all
the countries where we operate. But at this
particular juncture, Political Risk is on the
radar screen, but we’re not actively engaged
in the market looking for such coverage.
NYU is one of NYC’s largest landlords, so you
have massive property exposures as well.
By far the biggest exposure is the sidewalks
in front of our buildings. The City of
New York mandates that owners are
responsible for anything that takes place
on their sidewalks, so we’re responsible for
maintenance and repair. Luckily we have a
very good sidewalk-identification program
in place where the building managers
actually monitor their sidewalks.
NYU is really growing exponentially, so you have
a lot of construction risks as well.
NYU is doing construction around the world,
but the biggest construction risks are right
here in NYC. Those risks on a large scale are
insured through a rolling wrap-up program
that the university has, which allows us the
flexibility of managing our costs.
We have a huge emphasis on safety, so
every construction program, no matter
how big or how small, has a minimum
of three safety managers: One from
the owner, one from the construction
manager and one from the insurer. These
safety managers, on a rotating basis, walk
the site monthly, make recommendations
and report back. That has helped us to
reduce our Workers’ Comp costs—which
also reduces our liability cost based upon
the labor law in New York State.
You also have museums showing major art
exhibitions—what are some of the challenges
with those sorts of risks?
We are constantly being asked to lend our
rare books out and our artwork, and we
are constantly receiving rare artwork and
books into the university—so it’s a two-way
street. We do maintain a comprehensive
fine arts risk-management program that is
equal to the finest museums in the world—
we benchmark ourselves against museums
here in New York like the Metropolitan
and the Guggenheim to make sure that our
agreements are really identical to the [terms]
they would be looking at and requesting.
In the fine arts world we look for
something called nail-to-nail coverage
where an entity takes responsibility and
ensures that the artwork makes it from Point
A to Point B. Sometimes we’re responsible
for it, and sometimes it could be the
lending institution that’s responsible for it.
But we’re equipped to handle it either way
we have to, and we have the staff and the
expertise within the university to do that.
What about Workers’ Compensation—what are some
of the unique risks a university faces on that front?
The possibility of an occupational injury
is a risk that all organizations doing