UA creates Loss Control Team to cut down insurance claims

The University of Arizona is insured against these losses by the Arizona Department of Administration, said Julius Parker, associate vice president for business affairs.

"Every piece of property that the university owns is insured by the state," Parker said.

Steve Holland, director of the Department of Risk Management and Safety, said insurance losses at the UA cost the state between $4 million and $6 million a year, though $2 million to $3 million of that is to cover medical malpractice claims at the Arizona Health Sciences Center.

"That's pretty normal," Holland said of the malpractice costs.

Parker and Holland said the state wants to keep costs down because the money used to pay for losses is raised from taxes.

"They (the state) write the checks and this is taxpayers' money," Holland said.

Parker said that one of the Loss Control Team's goals is to make employees feel more personally responsible for university property. One of the ideas would create deductibles for the departments around campus.

Under the current state rule, Holland said there is a $100 minimum claim to recover the cost of a loss from the state.

A deductible would mean that after claims of a certain level, a department would have to cover a percentage of the costs, Parker said.

He said a similar idea has been proposed at the state level to induce state agencies to take steps to be more responsible.

"They figure if they can get into our pocket, they can get our attention," Parker said.

Len Bower, loss prevention manager for the state Administration Department, said plans are being laid to introduce the deductible system to the state's agencies, including the university.

"We're in the process of writing the rules on how that will effect the agencies," Bower said. He said the deductible will be up to $10,000 but will be negotiable.

The rules should go into effect in the coming fiscal year, Bower said.

Holland said deductibles are not supposed to be punitive, but since departments do not budget for losses, it can seem that way. For example, he said departments do not get the full replacement of things that are destroyed.

Another example, he said, is if a department's new $30,000 truck was wrecked, the department would have to pay for a part of the replacement cost.

Bower said property and liability losses cost the state $40 million a year and workers' compensation costs $15 million.

Holland said the university is hit with various discrimination suits every year, from allegations of Americans with Disabilities Act violations to wrongful termination suits, which qualify as losses.

The UA has no official policy on dealing with supervisors who have repeated problems with these situations, Holland said. However, he said he thinks it should.

"It may not only show up on the balance sheets, but it shows up in other areas," Holland said. He said employee productivity can be affected by the stress.

Holland said the Loss Control Team will look into ways of making departments more responsible with their keys to help minimize computer theft.

Bower said that rises in several losses in areas particular to the state's university system, like computer theft and intellectual transfer, had brought out about the system review.