Risk Financing and Insurance

What is Risk Financing?

At its core, risk financing exists to address one vexing problem: how to align a company’s willingness to take risks with its ability to do so, an exercise best done within the context of one’s organizational objectives. Risk management, of which financing is an integral part, is the set of measurable and sustainable actions for reducing the effect of uncertainty on those objectives. The establishment of measurable metrics is a key step in an organization’s growth toward a fully mature enterprise-wide risk management program.

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What if a department wants to buy, sell or lease a vehicle?

Contact the Insurance Department for instructions prior to buying, selling or leasing a vehicle. The Insurance Department will process the registration, insure the vehicle on the University's Automobile Insurance Policy and provide guidelines on the use of vehicles, driver training and authorizing drivers.

Are building contents automatically insured on the University's Property Policy?

Yes, there is limited coverage for contents on this policy, $250,000 per building. These contents must be University owned and the policy excludes losses due to theft. Departments can insure equipment and contents for a higher limit and include losses due to theft by purchasing additional contents insurance (Open Marine Policy). This insurance can be obtained by contacting the Insurance Department.

Will insurance pay all of a department's repair/replacement costs after a loss?

Insurance reimburses the cost to repair or replace with like-kind or quality. Every attempt is made to reimburse the department the costs to put the building back to the condition it was in prior to the loss. A department may incur some costs not covered by insurance since there are normal limitations and exclusions to the policy. The Insurance Department will explain the coverage in more detail when determining the scope.

What if a loss or damage occurs to a Harvard building?

Emergency repairs and other reasonable steps should be taken to protect the property from further damage. As soon as possible notify the Insurance Department of the details of the loss, by telephone (617-495-8668) and also submit a Property Loss Report Form. Further repairs should not be started until the scope of work and estimated costs for repairs have been agreed upon between the department and the Insurance Department.

How does the University's self-insurance programs work?

The University has a self-insured program for property, liability and automobiles. In the Self-Insured Property Program, a reserve is set up to fund for University losses, third party claim payments and to pay the premiums for excess insurance. Each fiscal year departments are charged a property and liability premium, allocated per building, to maintain the property and liability reserve. Departments with University vehicles are charged an annual premium per vehicle to maintain the auto reserve.

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