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Clear, specific insurance language seen as best defense for universities

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MINNEAPOLIS — University risk managers say they are frustrated by the complicated legalese in the indemnification provisions of their institution’s insurance coverage and whether the educational facilities have sufficient coverage.

“High-profile institutions, including universities, are often perceived to have deep pockets, making them a target in litigation,” Micah Knapp, a Philadelphia-based producer at The Graham Co. said Monday during the University Risk Management & Insurance Association Inc.’s conference in Minneapolis.

One way for universities to protect themselves from liability is to include in the contract with outside service providers that they indemnify the educational institution in situations where, for example, a worker for an outside party fell down on campus and was injured, he said.

“In many instances, there are manufactured claims and universities are held accountable. Without sufficient language, you are setting up a risk to lose in court to these claims. We are not saying do not pay for real claims that you are responsible for, but protect yourself from what should actually be a worker’s comp claim”, Mr. Knapp said.

“When writing or reviewing an indemnification agreement, use language that people can understand,” Benjamin Evans, executive director of risk management and insurance at the University of Pennsylvania, said during the conference. Should an event occur long after the contract was written, the intent will be clear, he said.

Aside from completely indemnifying an educational institution, which Mr. Knapp said is not always possible depending on state law, outside parties can cover the university or college under their negligence coverage as an additional insured, he said.

“Effective insurance requirement terms are not capable of boiler plate, one size fits all treatment,” one of session speaker said Thomas Morrin, vice president of the Graham Company. “However, a sample of general liability requirements in contracts would be $1 million per occurrence, $2 million aggregate, $5 million as an umbrella liability and $1 million in employer’s liability.”