Table of Contents

• Overview
  
• Obtaining Coverage
  
• Building Valuation
  
• Leased Property
  
• Rental Income (Bond Insurance)
  
• Claims Processing
  
• Premiums
  
• Building Valuation Updates
  
• Attachments
  

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Overview

Losses to buildings and contents owned by Florida State University (FSU) or coverage required under the terms of a lease agreement are covered in accordance with Florida Statute 284 for the perils listed in Table 1. Deductibles vary and are based on the type of loss incurred.

Table 1: Covered Perils for Building and Contents Insurance Coverage

Fire	Lightning
Windstorm	Hail
Explosion	Riot
Aircraft/Vehicle Damage	Smoke
Flood	Sinkhole Collapse

Coverage for all University owned buildings and contents must be secured and maintained in accordance with Florida Statute 284. The Department of Financial Services, Division of Risk Management (DFS) administers the Property Insurance program for the State of Florida.

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Obtaining Coverage

It is the responsibility of the Insurance and Claims Manager to ensure that all buildings and contents are adequately insured under the State Risk Management Trust Fund. This is accomplished by working with Facilities Project Managers, the University Lease Administrator, and other responsible parties.

To obtain coverage, the following steps must be completed by the Facilities Project Manager or other responsible party.

1. The Insurance and Claims Manager must be notified when a new or renovated building reaches substantial completion, a building is demolished, or the University takes possession of an existing building.
2. For new buildings and renovations, the Building Code Administrator must also provide the Insurance and Claims Manager with a Certificate of Occupancy.
3. With the exception of leased or demolished property, a Building Insurance Request Form (see Attachment 1) must be completed and submitted to the Insurance and Claims Manager.
4. Please note, the Building Insurance Request Form must be completed in its entirety and can only contain one building or structure per form.
5. Pictures of the exterior (front, sides and rear) of the new or renovated building must be submitted to the Insurance and Claims Manager.
6. The Building Insurance Request Form and pictures must be provided to the Insurance and Claims Manager prior to the cancellation of the Builder’s Risk Insurance Policy.
7. Once this information is provided to the Insurance and Claims Manager, the Insurance and Claims Manager will secure coverage for the building. Upon confirmation of coverage, the Insurance and Claims Manager will give approval for cancellation of the Builder’s Risk Insurance.

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Building Valuation

When establishing the value of a building, only the portion within the building envelope shall be considered. Exclusions to the building envelope are presented in Table 2. The building envelope should only include the occupancy, gross square footage, construction type, and materials.

Table 2: Exclusions to Building Envelope

Land	Parking Lots
Exterior Lighting	Walks
Fences	Utilities
Building Foundations	Landscaping
Excess Architectural and Engineering Fees-defined as costs associated with any element of the contracted cost of a building, which is not covered for loss under our policy. Example: The cost for parking lots surrounding a building is not insurable under our policy. The associated A&E costs embedded in the contract for these parking lots are also not eligible for coverage. The applicable values are “Excess A&E fees” and should be removed from consideration in calculating the ACV for insurable value.

An estimation of the building contents value must also be provided.

Upon receipt of the completed Building Valuation Form, pictures of the building and the Certificate of Occupancy, the Insurance and Claims Manager will obtain coverage for the property listed and provide the person submitting the request for coverage an email confirming that coverage was secured and authorize the Builder’s Risk Insurance to be cancelled.

When a building is going to be demolished, it is the duty of the Associate Vice President of Facilities or Project Manager to notify the Insurance and Claims Manager. A Building Deletion Form (see Attachment 2) must be completed and forwarded to the Insurance and Claims Manager prior to the date of deletion so property coverage can be terminated.

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Leased Property

When leasing space not owned by FSU, the University Lease Administrator will forward a copy of the new lease agreement to the Insurance and Claims Manager via email and notify the Department leasing the property to contact the Insurance and Claims Manager to obtain insurance coverage for contents.

In accordance with Florida Statute 284 all contents owned by State of Florida agencies must have insurance coverage under the State Risk Management Trust Fund.

In order to obtain this coverage, a Building Valuation Form (see Attachment 1) must be completed. This form is usually completed by the Leasing Management Company relative to the building envelope (see Building Valuation section) and the contents information should be provided by the Department requesting coverage.

Once completed, the form along with pictures of the building being leased must be forwarded to the Insurance and Claims Manager to obtain coverage through DFS.

It is the responsibility of the Department leasing the space to advise the Insurance and Claims Manager on an annual basis, no later than March 15, of any changes in contents values so insurance coverage can be updated.

The Department leasing the building is also required to notify the Insurance and Claims Manager if a lease will be renewed or non-renewed. Failure to provide this information will result in an automatic suspension of insurance coverage. This is a strict violation of the Florida Statute and will result in no coverage for lost contents should a covered peril event occur.

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Rental Income (Bonded Insurance)

All FSU buildings (Residence Halls) financed in whole or in part by revenue bonds or certificates are provided with Rental Value Insurance. This insurance is provided for the purpose of indemnifying the Department if a covered peril occurs resulting in the Department’s inability to earn income.

Rental income insurance is required by the terms of any bonding, revenue certificates or resolutions. The Bond or Certificate must actually identify the name(s) of the property in order for insurance to be in place.

The amount of insurance coverage is one times the amount of annual income for a building. The University Housing Department must provide the Insurance and Claims Manager with a copy of the revenue bond listing the structure along with the annual value of the rental expense in order for coverage to be secured by DFS.

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Claims Processing

In the event of a loss occurring as a result of a covered peril as listed in the Overview, the Department must immediately comply with the following:

• Notify the State Fire Marshall if the loss is due to a fire and/or a disabled fire alarm system.
• Notify the FSU Insurance and Claims Manager.
• As economically possible, protect the property from further damage using reasonable care.
• Make a list of all contents damaged and provide the values.
• Departments should maintain an up-to-date property list.
• Take as many pictures of the damage as possible prior to any repairs and store on a CD-ROM or equivalent electronic media storage device.
• Photos should document the damage caused by the event(s) that breached the building envelope. They should also document the damage to the interior of the building and any contents.
• Keep documentation of expenses incurred to prevent further damage.
• If wind and/or flood damages occur, losses will be handled separately and expenses should be kept separate.
• Keep a log of all repairs performed, including the costs of the repairs, work orders, purchase orders, invoices for services etc.
• Provide a written report assessing the damage caused by the loss. This information can be obtained from Architectural or Engineering Reports.

The Department will provide this information to the Insurance and Claims Manager who will then report the claim to DFS. The above information will support the claim filed for the loss. The Insurance and Claims Manager will work with the Department and DFS until the loss has been fully repaired and the claim has been considered by the State Risk Management Trust Fund. As the claims filing process is extremely complex, please contact the Insurance and Claims Manager for any questions or assistance.

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Premiums

In accordance with Florida Statute 284.02, DFS calculates annual property premiums charged to the University prior to the start of each fiscal year. Premiums are assessed in a retrospective manner for coverage provided during the prior fiscal year and is based on insured values, exposure to losses, and experience (actual loss history).

Once the premiums have been calculated, an invoice is submitted to FSU, Department of Environmental Health & Safety (EH&S). EH&S will issue payment for all premiums assessed by DFS from the general account of EH&S. EH&S will bill all non-E&G budget entities in September or October for reimbursement of their portion of the premiums charged.

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Building Valuation Updates

During 2007, the University had all owned buildings and contents professionally appraised to determine their Actual Cash Value (ACV). This appraisal included improvements and betterments to all buildings made throughout the lifetime of the building. This appraisal was conducted using applicable standard appraisal techniques conforming to the Uniform Standards of Professional Appraisal Practices. The University utilized the values obtained through the appraisal process to establish the basis for ACV for each building and contents.

At the beginning of each fiscal year, DFS provides FSU with a copy of the Property Schedule that lists all buildings and contents showing the ACV used for establishing insurance premiums. This schedule is based on information provided to DFS by FSU throughout the previous fiscal year. The Insurance and Claims Manager reviews the Property Schedule annually for errors.

Once the Property Schedule has been reviewed, the Insurance and Claims Manager notifies DFS of any required changes by submitting a copy of the page from the Property Schedule with the written changes needed. DFS will make all changes and send the Insurance and Claims Manager a new version of the Property Schedule showing the changes have been made.

Every three years, the Insurance and Claims Manager will forward a copy of the annual Property Schedule to an Independent Appraisal Company (IAC). The IAC will recalculate the ACV of the buildings utilizing the Marshall & Swift/Boeckh and RS Means software. This computer software updates the values of the property utilizing nationally recognized trend factors. This information will be provided to the IAC in October of the fiscal year being updated. The updates will be provided to the Insurance and Claims Manager no later than March of the fiscal year being updated. The Insurance and Claims Manager will make the necessary changes to the property schedule and forward to DFS prior to May 15th of the fiscal year being updated so the changes can be reflected in the next fiscal year’s Property Schedule. This appraisal methodology has been reviewed and approved by DFS.

The Insurance and Claims Manager will contact the Property Section of the Controller’s office to verify content values of each building every three years beginning with fiscal year 2009. Each Department is encouraged to contact the Insurance and Claims Manager of any large changes made in the contents values of buildings as they are modified or purchased.

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Attachments

Format			Form Number	Form Name
web	doc	pdf
			EHS 2-2	Building Insurance Request Form
			EHS 2-13	Building Deletion Form

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