Education

A Foreign Education

Global risks in education demand the use of international risk managers.
By: | March 3, 2014 • 7 min read

As more and more American colleges and universities broaden their international footprints, their risk profiles also change. Many are expanding to the developing world, where risks are greater. To keep up, a small but growing number of institutions are hiring full-time international risk managers, according to industry leaders.

Of the 4,500-odd American colleges and universities, about 600 employ dedicated risk managers, and 29 employ full-time international risk managers.

“It’s a new trend, and it’s taking root,” said Jean Demchak, the Global Education and Public Entity practice leader for Marsh. Most were hired in the past three years, and their ranks are growing at about 10 per year.

That trend is most visible in large universities with very mature international programs. However, small schools, including many community and junior colleges, also have international programs that require risk management.

Gone are the days when mere undergraduate study-abroad programs defined an institution’s international presence, said Joan Rupar, division president, Foreign Casualty, AIG.

The traditional health and safety risks to undergraduates remain, but are now complicated by increasingly commercialized enterprises involving faculty and local nationals that raise issues of local and international law, employment and environmental regulations. Trips to remote, undeveloped, and politically unstable locations introduce yet a new set of medical access, kidnap and crime risks.

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“When institutions contract with commercial entities for clinical trials or to use their engineering or agriculture expertise in the market, their scope of liability opens considerably,” said Rupar.

“Institutions plan to bring the litigation back to the U.S. if anything happens, but that doesn’t always happen.”

Yet institutions take on the risks with zeal, since foreign programs prepare students for a globalized workplace and political environment, and commercial opportunities compensate for diminishing public education funds as tuition soars, said Paul Pousson, associate director of risk management at The University of Texas System. “Every university president wants to expand the institution’s foreign footprint.”

Compliance With Local Laws

Mike Liebowitz, senior director of enterprise risk management and insurance, New York University — who is one of the 29 full-time international risk managers — said institutions must protect themselves with broad coverage that complies with local regulations.

Domestic insurance policies may be useless for overseas claims because many countries require a licensed insurer, Liebowitz said. U.S. coverage might not be valid in another country because the local coverage is often taxed.

“It’s a revenue source for the country,” Liebowitz said.

Although most exposures for foreign campuses are not much different from those in the United States, employment exposures are a notable exception. When institutions hire from the local population, as foreign campuses and research facilities inevitably will do, risk managers should examine the full battery of employment issues, said Pousson. Those questions include:

• What’s the position to be filled?

• How are employees paid?

• What are the tax issues?

• What are the fringe benefits?

• What are the banking and cash management issues?

• Will the institution open a local bank account?

• Who will have access to the account?

• Who will reconcile it?

Institutions must also comply with local building and construction codes when they buy or renovate property, said Harsh Dutia, vice president, Multinational practice, Marsh USA. “They’re concerned about being good corporate citizens in these countries.”

When setting up the foreign program, Pousson said, most institutions need to tap legal and accounting consultants external to the school. In some cases, those may be professionals in the host country.

Mitigating Health and Safety Risks

Although commercial exposures account for a large and growing part of universities’ international risk, the traditional one — students studying abroad — remains Temple University’s single greatest international risk, said Lisa Zimmaro, assistant vice president for risk management and treasury, Temple University.

“You have a population of 18- to 24-year-olds who think they’re immortal,” she said. “They’re not old enough to drink legally at home, and suddenly they can order a drink. They take risks.”

Some trips are risky simply by virtue of their purpose and location. For example, said Bill Hoye, executive vice president and chief operating officer, IES Abroad, which manages 100 study-abroad programs in 36 global locations, a service-learning trip to an AIDS clinic or a construction site in Africa may carry a range of developing world risks: illness and injury, remoteness and access to medical care.

“You have a population of 18- to 24-year-olds who think they’re immortal.”

— Lisa Zimmaro, assistant vice president, Temple University

“Before you go, have a plan in place,” Hoye said. That may mean bringing a sophisticated medical kit as well as trained and certified first responders.

“You identify the foreseeable risks in that environment and then tailor a plan that spells out how you respond to each risk.”

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Safe educational travel is itself a topic of academic research as well as a cottage industry. UCLA’s Center for Global Education provides an exhaustive clearinghouse of best practices and information, including checklists, to help institutions plan for conditions around the world, such as the lack of smoke detectors in France, penalties in Singapore for chewing gum, which way to look before crossing the street in Auckland and evacuations from war zones.

The University of Pennsylvania emphasizes pre-departure preparation and training of its students, establishing contingency plans for “every imaginable” situation, including kidnap, ransom and war, said Jaime Molyneux, director of international risk management, University of Pennsylvania.  Where some institutions use commercial travel tracking systems to broadcast alerts and establish a head count in emergencies, Penn requires students to use its homegrown travel tracking system.

Many risk managers and insurance brokers advocate for site visits and assessments when possible. Liebowitz of NYU — a “risk-conservative” school — has visited many of its campuses on every continent except Antarctica. Zimmaro of Temple University credited her site visits with being able to evacuate students from Japan without undue incident after the 2011 earthquake and tsunami. “It was the first time I chartered a plane,” she said.

If they can’t make site assessments, said Rupar of AIG, risk managers at least should learn “an awful lot” about building codes, safety and security in locations of repeat travel, and facilities used as classrooms. That information will transfer to the students and faculty in pre-trip training. Some institutions that can’t make site visits choose to contract with vetted and established assistance providers, such as International SOS, a medical and travel security services company, or the travel tracking service company Terra Dotta Software, which pushes out alerts, about say, a dengue fever outbreak in Ecuador, to affected travelers, per their itineraries.

The most effective mitigation, Pousson said, involves internal cross-collaboration between risk managers, international studies, faculty and athletics to hash out the full scale of the foreign undertaking. Some institutions tackle this through international oversight committees, said Rupar. “They gather all the stakeholders at the table to say, ‘This is the program we want, and these are the risks. How do we protect the university’s assets?’ ”

One of the potentially best training programs seldom takes place in the United States, said Gary Rhodes, director, UCLA Center for Global Education: foreign language instruction in the early grades, when the child’s neural pathways for language are still elastic. “It’s harder to learn a language at the college level,” he said.

Premium Management

Many colleges and universities belong to self-insured consortia, and more want to belong, said Jan Trionfi, risk management, environmental health & safety, Central Michigan University (CMU), which belongs to the Michigan Universities Self-Insurance Corp. (MUSIC), a consortium of 11 Michigan public universities.

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CMU buys its “very good, very broad” foreign liability insurance through the consortium at about a 15 percent savings, thanks to the volume purchase. Coverage includes general liability, property, auto liability, workers’ compensation, and the once exotic but now routine kidnap, ransom, emergency evacuation and repatriation coverage. Some but not all MUSIC members buy the policy, which isn’t included in the core general liability coverage. Because each institution has its own risk tolerance, they don’t share risk, instead buying stand-alone policies, said MUSIC’s broker, Jerry McKay, senior vice president, Marsh Inc.

In addition to cost savings, McKay said, consortia members benefit from sharing best practices. “Typically, the larger members develop best practices that they share freely with the other members.”

“Consortia are a forum for members to discuss how they found missing travelers, how they keep track of them, how they’ve helped them, what’s their disaster plan,” said Rupar.

“That takes a lot of collective thinking, and the result is a very good thing.”

Susannah Levine writes about health care, education and technology. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Absence Management

Establishing Balance With Volunteers

It’s good business to allow job-leave for volunteer emergency responders, whether or not state laws apply.
By: | January 10, 2018 • 7 min read

If 2017 had a moniker, it might be “the year of the natural disasters,” thanks to a phenomenal array of catastrophic or severe events— hurricanes, tornadoes, wildfires, ice storms and floods.

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Combined with smaller-scale fires and other emergencies, these incidents tax the resources of local and state emergency services, often prompting the need to call volunteer emergency responders into action.

But as lean as most organizations are already running, volunteer activities can sometimes cause friction between employees and employers. Handling conflicts the wrong way can potentially lead to legal headaches, harm employee morale and batter a company’s reputation.

State by State Variations

Most employers are aware of the various federal and state leave laws protecting their employees, including family and medical leave, pregnancy leave and military leave. But leave laws that protect the livelihoods of volunteer emergency responders are more likely to fly under the radar of some HR managers and risk managers.

Such laws don’t exist in every state, but more than 20 states do have some type of law in place to protect volunteers including emergency responders, firefighters, disaster workers, medical responders, ambulance drivers or peace officers.

Marti Cardi, vice president of Product Compliance for Matrix Absence Management

The laws vary broadly. Nearly all specify that such leave be unpaid, and that employees disclose their volunteer status to employers and provide documentation for each leave. But there is a spectrum of variations in terms of what may trigger an eligible leave. Some, for instance, apply for any emergency that prompts a call from the volunteer’s affiliated responder group. Others may require a government declaration of emergency for the law to be triggered.

While many of the laws do not explicitly require employers to let employees leave work when called to an emergency during a shift, most specify that an employee may be late or even miss work entirely without facing termination or any other adverse employment action.

Some states mandate a maximum number of unpaid leave days that a volunteer can claim. But others may place more significant burdens on employers. In California, for instance, employers with 50 or more employees are required to grant up to 14 days of unpaid leave for training activities in addition to any leave taken to respond to emergency events. For multistate employers, keeping on top of what obligations may apply in each circumstance can be a challenge.

Significant Risks

Large or mid-sized employers may rely on absence management providers to keep them in compliance. For smaller employers though, it may be as simple as looking up a state’s law via Google to find out what’s required. However, checking in with the state department of labor or the company’s attorney may be the best way to get the correct facts.

“I would caution that just because you don’t find something [on the internet], it doesn’t mean it’s not there,” said absence management and employment law attorney Marti Cardi, vice president of Product Compliance for Matrix Absence Management.

For example, Cardi said, an obscure Texas law provides job-protected leave for volunteer ham radio operators called into service during an emergency.

Cardi said employers should task HR to investigate the laws in each state the company operates in, and to ensure that supervisors are educated about the existence of these laws.

“If a supervisor is told by one of his or her employees, ‘Sorry I’m not coming in today … I’ve been called to volunteer firefighter duty for the [nearby region] fire,’” she said, you want to be sure that the supervisor knows not to take action against the employee, and to contact HR for guidance.

“Training supervisors to be aware of this kind of absence is really important.”

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An employer that does terminate a protected volunteer for responding to an emergency may be ordered to pay back wages and reinstate the employee. In some cases, the employee may also be able to sue for wrongful termination.

And of course, “you don’t want to be the company in the headlines that is getting sued because you fired the volunteer firefighter,” she added.

If an employer bars a volunteer from responding, the worst-case scenario may be a third-party claim. Failure to comply with the law could give rise to a claim along the lines of “‘If you had complied with your statutory obligation to give Jane Doe time to respond, my loved one would not have died,’” explained Philadelphia-based Jonathan Segal, partner at law firm Duane Morris and managing principal of the Duane Morris Institute.

“That’s the claim I think is the largest in terms of legal risk.”

Even if no one dies or is seriously injured, he added, “there could still be significant reputational risk if an individual were to go to the media and say, ‘Look, I got called by the fire department and I wasn’t allowed to go.’”

The Right Thing to Do

What employers should be thinking about, Segal said, is that whether or not you have a legal obligation to provide job-protected leave for volunteer responders, “there’s still the question of what are the consequences if you don’t?”

Employee morale should be factored in, he said. The last thing any company wants is for employees to perceive it as insensitive to their interests or the interests of the community at large.

“Sometimes employers need to go beyond the law, and this is one of those times,” — Jonathan Segal, partner, Duane Morris; managing principal, Duane Morris Institute

“How is this going to resonate with my employees, with my workforce, how are people going to see this? These are all relevant factors to consider,” he said.

There’s an argument to be made for employers to look at the bigger picture when it comes to any volunteer responders on their payroll, said Segal.

“Sometimes employers need to go beyond the law, and this is one of those times,” he said. “Think about the case where’s there’s not a specific state law [for emergency responders] and you say to a volunteer, ‘No, you can’t leave to deal with this fire’ and then people die. You as an employer have potentially played a role, indirectly, because you didn’t allow the first responder or responders to go,” he said.

The bottom line is that “it’s the right thing to do, even if it’s not required by law,” agreed Cardi.

“I feel that companies should have a policy that they’re not going to discipline or discharge someone for absences due to this kind of civic service, subject to verification of course.”

Clear Policy

While most employers do strive to be good corporate citizens, it goes without question that employers need to guard their own interests. It’s not especially likely that volunteer responders will try to take advantage of the unpaid leave allowed them, but of course, it could happen.

That’s why it’s important to have policies that are aligned with state laws. Those policies could include:

  • Notifying the company of any volunteer affiliations either upon hire or as soon they are activated as volunteers.
  • Requiring that employees notify a supervisor as soon as possible if called to an emergency (state requirements vary).
  • Requiring documentation after the event from the head of the entity supervising the volunteer’s activities.

If at some point it becomes excessive – someone has responded to emergencies five times in nine weeks, then it’s time to examine the specifics of the law and have a discussion with the employee about what’s reasonable, said Segal. It may also be time to ask specifics about whether the person is volunteering each time, or are they being called.

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In some cases, the discussion may need to be about finding a middle ground, especially if an employee has taken on an excessively demanding volunteer role.

“We encourage volunteers to pick the style that best fits their schedule,” said Greta Gustafson, a representative of the American Red Cross. “Disaster volunteers can elect to respond to disasters locally, nationally, or even virtually, and each assignment varies in length — from responding overnight to a home fire in your community to deploying across the country for several weeks following a hurricane.

“The Red Cross encourages all volunteers to talk with their employers to determine their availability and to communicate this with their local Red Cross chapter.”

Segal suggests approaching it as an interactive dialogue — borrowing from the ADA. “Employers may need to open a discussion along the lines of ‘I need you here this week because this week we have a deliverable on Friday and you’re critical to that client deliverable,’” he said, but also identify when the employee’s absence would be less critical.

No doubt there will be tough calls. An employer may have its hands full just trying to meet basic customer needs and need all hands on deck.

“That may be a situation where you say, ‘First let me check the law,’” said Segal. If there’s a leave law that applies, “then I’m going to need to comply with it. If there’s not, then you may need to balance competing interests and say, ‘We need you here.’” &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]