Education Risk Management

Insuring Feathers, Fur and Football Tradition

Using live animals as sports mascots requires a focus on risk mitigation.
By: | July 18, 2016 • 5 min read
football fan

Lions, tigers and bears. Oh my!

Not to mention the buffalo, a ram, horses, a falcon, an owl and various dogs. The animals that pump up sports fans at universities across the United States range from a gamecock and an eagle to a bulldog and a bluetick coonhound.

“There are quite a few of them out there,” said Vincent Morris, executive director of the higher education practice at Arthur J. Gallagher & Co.

“It’s the tradition and pageantry of it all. The pounding hooves before a football game, the raptor soaring around the stadium, the tiger growling … .

“Mascots are so different,” he said.

“What one does with a University of Georgia bulldog is different from what one does with a University of Colorado buffalo.”

But they all need to be insured for mortality as well as potential property damage or bodily injury. Plus, the animals need to be cared for, whether it’s ensuring they have proper nutrition and living quarters to making sure they are humanely and adequately restrained from harming fans.

Universities with mascots also must accept that there will be objections by animal rights groups.

Vincent Morris, executive director, higher education practice, Arthur J. Gallagher & Co

Vincent Morris, executive director, Higher education practice, Arthur J. Gallagher & Co

“Nothing says ‘Go, team!’ less than an unhappy animal, and with athletes and coaches so prone to raising a ruckus on and off the field, there’s no reason to subject a real animal to the stress of being a mascot,” writes People for the Ethical Treatment of Animals (PETA) on its website.

“There’s a lot of pressure from people who say we shouldn’t have animals living like that,” Morris said. “There’s a kind of movement in the country that is concerned about caged animals … not in their natural habitat.”

He noted that most universities do not have live mascots. Of about 3,500 schools, fewer than 50 use live animals for mascots.

“When you are talking about risk management,” Morris said, “you are talking about loss control, keeping bad things from happening  — and knowing how to pay for them when they do. You don’t want to have a buffalo rampaging through the marching band.

“You have to worry about the animal being stolen or escaping,” he said.

“There have been pranks. LSU’s tiger has been released or kidnapped on more than one occasion. Arkansas’ razorbacks have gotten out on more than one occasion and killed other animals.”

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“Normally,” said Mitchel Kalmanson of the Lester Kalmanson Agency, which specializes in rare and unusual risks, especially animals, “commercial animal liability is broken down into either domestic or exotic.”

Domestic animal liability would cover, for example, dogs (mascots for Eastern New Mexico University, Texas A&M, University of Georgia, University of Tennessee and Yale), horses (Southern Methodist University, University of Oklahoma and University of Southern California),  or goats (Naval Academy).

Exotic coverage would be necessary for a bear (Baylor University), razorback (University of Arkansas), African lion (University of North Alabama), buffalo (University of Colorado, Boulder) or tiger (Louisiana State University).

“I insure [mascot owners] all the time,” Kalmanson said, noting that he also owns 18 “big cats” — tigers, lions and leopards — that are hired to appear at fairs, schools and special events.

“Sometimes mascot animals live with handlers,” Morris said.

“Some live on a farm nearby. Some live with a designated family or sometimes, athletic staff.”

Some like Mike, a Siberian Bengal tiger, lives in a specially built 15,000-square foot habitat with a waterfall, stream and foliage on the campus of Louisiana State University, according to “Hear Me Roar: Should Universities Use Live Animals as Mascots,” a 2011 article by Jessica Baranko for the “Marquette University Sports Law Review.”

Baylor University’s bear mascots, all named “Judge” followed by a surname, also live in a campus facility with a waterfall, pond, cave, rocks and foliage. Students call it “The Pit,” Baranko writes.

Usually, Kalmanson said, the university is not the owner of the mascot animals, but is added “as an additional insured on the owner’s liability policy or commercial animal owners’ liability policy.”

Mitchel Kalmanson, principal, Lester Kalmanson Agency

Mitchel Kalmanson, principal, Lester Kalmanson Agency

“You want to make sure the owner’s liability policy is exhausted before it goes into the university’s,” Kalmanson said.

Nonetheless, it’s important for universities to have written guidelines and procedures related to the mascots. They should ensure the owner has the proper state, federal and local permits and licenses to own and exhibit the animal, and ensure proper nutrition and medical care is provided.

When animals are transported, the trailer or truck must be properly ventilated, he said. Inside, the animal’s enclosure, for a big cat, for example, should be made of Lexan, a bulletproof polycarbonate, and steel instead of a less secure wire cage. Plexiglas, he noted, will crack and break if used for big cats.

When the animals are taken onto the field, handlers — and back-up handlers for cases of emergency — must be properly trained and make sure the buffalo, for example, is tethered to a safety cable to keep it from jumping into the crowd, Kalmanson said.

Animals should be brought to the fields before actual games so they can become used to the area, lights and noise. There should be an “exit strategy,” in case something goes wrong and the handlers need to move the animal to a secure area, he said. Sedation equipment should also be available.

Policy deductibles can range from $2,500 to $10,000 or more per claim, depending on the “exotic nature of the animal” and whether it is exhibited or whether it is galloped, for example, down the field.

Too often, he said, universities do not have set guidelines, and handlers or families “take too many shortcuts” about safety procedures. “There’s nobody looking over their shoulder saying they should follow the guidelines. There should be standard operating procedures available.”

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That’s good for the animal as well as the reputational brand of the university, he said.

Kalmanson said liability coverage should be for a minimum of $1 million per occurrence aggregate. Deductibles can range from $2,500 to $10,000 or more per claim, depending on the “exotic nature of the animal” and whether it is exhibited or whether it is galloped, for example, down the field.

If properly written, it will include coverage for bodily injuries or property damage caused by the animals. The policy would not, however, be triggered if PETA or some other animal rights group filed a lawsuit alleging mistreatment.

“There’s not much recourse but to defend that on its own merits,” Kalmanson said. “That would not be a covered hazard.”

Anne Freedman is managing editor of Risk & Insurance. She can be reached at [email protected]
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Risk Insider: Elizabeth Carmichael

ERM Is Not Just ‘Our’ Problem

By: | June 15, 2016 • 2 min read
Elizabeth Carmichael is the director of compliance and risk management for Five Colleges Inc., which includes Amherst, Hampshire, Mount Holyoke, and Smith College. She can be reached at [email protected]

Jack Hampton recently wrote, “Risk managers have a staggering problem on their hands if they are ever going to make enterprise risk management inroads across the full Academy. There is no other way to see it.”

And he’s right. Risk managers will always have a staggering, even insolvable problem, on their hands as long as they are the ones responsible for developing and implementing ERM at their institution. The same holds true for any business.

I’ve recently come back from the Higher Education Compliance Conference of the Society of Corporate Compliance and Ethics (SCCE).

There, I was heartened to hear presentations from multiple institutions where a team of senior leaders across the institution lead the ERM process.

As we know, engaging senior leadership in the ERM process helps to ensure the success of the program by placing the risk ownership across the institution, rather than allowing the perception of ownership to sit in Risk Management.

As we know, engaging senior leadership in the ERM process helps to ensure the success of the program by placing the risk ownership across the institution, rather than allowing the perception of ownership to sit in risk management. The most mature and robust programs fully integrate the compliance, ERM, traditional risk management and internal audit functions.

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The risk management burden, as Jack points out, is endless and ever varying. We will never be able to stop the rogue employee from breaking the rules, including the grumpy professor trying to make a point by publicly illustrating gaps in our systems.

We may seldom be able to stop the determined assassin before he strikes.

However, an ERM program can protect the institution or the company from the consequences of these actions while boosting resiliency and resources if it enables us to develop processes that will

  • Put organizational structures in place to identify and manage risk across the enterprise (including compliance risks);
  • Create codes of conduct, policies and procedures in place to guide people on what to do;
  • Educate and train our community so they know what they are expected to do;
  • Give our operations managers tools to self-monitor their risk management and compliance activities and audit the operations as necessary;
  • Develop a clear reporting and investigation processes for claims and complaints;
  • Discipline those that willfully break the rules; teach those that accidentally break the rules; and
  • Investigate and remediate systemic problems and risks.

So, how do we engage leadership in embracing and leading ERM? We talk about it, frequently and to anyone who will listen.

Practice your one-minute ERM elevator speech and use it on faculty, deans, all of your director-level peers and especially senior leaders.

Meet with key risk partners and share the benefits of an enterprise-wide approach.

Be a thought leader on your campus and tie the ERM process to the academic mission.

Gates Garrity-Rokous, vice president and chief compliance officer at The Ohio State University recommends relentless optimism.

Help your senior leaders and administrators understand that using the ERM process will make their lives easier, because ERM will help the institution allocate resources by highest need. Tell them how the ERM process will make our campuses better through improved awareness and clearer communication of risk issues.

It’s easy to feel discouraged in the face of constant stories of tragedies and malfeasance. But there are silver linings.

The students at UCLA were prepared and knew how to shelter in place so that casualties from the Mainak Sarkar shooting were limited. We’re getting better, we’re doing more with less and finding continual improvement.

Find your inner optimist, share your successes with your peers, keep calm and carry on.

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Sponsored Content by Chubb

Electronic Waste Risks Piling Up

As new electronic devices replace older ones, electronic waste is piling up. Proper e-waste disposal poses complex environmental, regulatory and reputational challenges for risk managers.
By: | July 5, 2016 • 4 min read
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The latest electronic devices today may be obsolete by tomorrow. Outdated electronics pose a rapidly growing problem for risk managers. Telecommunications equipment, computers, printers, copiers, mobile devices and other electronics often contain toxic metals such as mercury and lead. Improper disposal of this electronic waste not only harms the environment, it can lead to heavy fines and reputation-damaging publicity.

Federal and state regulators are increasingly concerned about e-waste. Settlements in improper disposal cases have reached into the millions of dollars. Fines aren’t the only risk. Sensitive data inadvertently left on discarded equipment can lead to data breaches.

To avoid potentially serious claims and legal action, risk managers need to understand the risks of e-waste and to develop a strategy for recycling and disposal that complies with local, state and federal regulations.

The Risks Are Rising

E-waste has been piling up at a rate that’s two to three times faster than any other waste stream, according to U.S Environmental Protection Agency estimates. Any product that contains electronic circuitry can eventually become e-waste, and the range of products with embedded electronics grows every day. Because of the toxic materials involved, special care must be taken in disposing of unwanted equipment. Broken devices can leach hazardous materials into the ground and water, creating health risks on the site and neighboring properties.

Despite the environmental dangers, much of our outdated electronics still end up in landfills. Only about 40 percent of consumer electronics were recycled in 2013, according to the EPA. Yet for every million cellphones that are recycled, the EPA estimates that about 35,000 pounds of copper, 772 pounds of silver, 75 pounds of gold and 33 pounds of palladium can be recovered.

While consumers may bring unwanted electronics to local collection sites, corporations must comply with stringent guidelines. The waste must be disposed of properly using vendors with the requisite expertise, certifications and permits. The risk doesn’t end when e-waste is turned over to a disposal vendor. Liabilities for contamination can extend back from the disposal site to the company that discarded the equipment.

Reuse and Recycle

To cut down on e-waste, more companies are seeking to adapt older equipment for reuse. New products feature designs that make it easier to recycle materials and to remove heavy metals for reuse. These strategies conserve valuable resources, reduce the amount of waste and lessen the amount of new equipment that must be purchased.

Effective risk management should focus on minimizing waste, reusing and recycling electronics, managing disposal and complying with regulations at all levels.

For equipment that cannot be reused, companies should work with a disposal vendor that can make sure that their data is protected and that all the applicable environmental regulations are met. Vendors should present evidence of the required permits and certifications. Companies seeking disposal vendors may want to look for two voluntary certifications: the Responsible Recycling (R2) Standard, and the e-Stewards certification.

The U.S. EPA also provides guidance and technical support for firms seeking to implement best practices for e-waste. Under EPA rules for the disposal of items such as batteries, mercury-containing equipment and lamps, e-waste waste typically falls under the category of “universal waste.”

About half the states have enacted their own e-waste laws, and companies that do business in multiple states may have to comply with varying regulations that cover a wider list of materials. Some materials may require handling as hazardous waste according to federal, state and local requirements. U.S. businesses may also be subject to international treaties.

Developing E-Waste Strategies

Companies of all sizes and in all industries should implement e-waste strategies. Effective risk management should focus on minimizing waste, reusing and recycling electronics, managing disposal and complying with regulations at all levels. That’s a complex task that requires understanding which laws and treaties apply to a particular type of waste, keeping proper records and meeting permitting requirements. As part of their insurance program, companies may want to work with an insurer that offers auditing, training and other risk management services tailored for e-waste.

Insurance is an essential part of e-waste risk management. Premises pollution liability policies can provide coverage for environmental risks on a particular site, including remediation when necessary, as well as for exposures arising from transportation of e-waste and disposal at third-party sites. Companies may want to consider policies that provide coverage for their entire business operations, whether on their own premises or at third-party locations. Firms involved in e-waste management may want to consider contractor’s pollution liability coverage for environmental risks at project sites owned by other entities.

The growing challenges of managing e-waste are not only financial but also reputational. Companies that operate in a sustainable manner lower the risks of pollution and associated liabilities, avoid negative publicity stemming from missteps, while building reputations as responsible environmental stewards. Effective electronic waste management strategies help to protect the environment and the company.

This article is an annotated version of the new Chubb advisory, “Electronic Waste: Managing the Environmental and Regulatory Challenges.” To learn more about how to manage and prioritize e-waste risks, download the full advisory on the Chubb website.

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Chubb. The editorial staff of Risk & Insurance had no role in its preparation.




With operations in 54 countries, Chubb provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients.
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