Being bored at work is never an issue for Michael Liebowitz. As the head of the risk-management department at New York University, one of the country’s largest private institutions of higher learning, Liebowitz faces an incredible array of risks every day—many of which never crop up in Corporate America.
In addition to such standard-issue perils as Workers’ Compensation, Employment Practices Liability and the Commercial Property exposures that come with being one of New York City’s largest landlords, Liebowitz also has to think like the risk manager at a major hotel chain—with more than a dozen high-rise dormitories scattered around Manhattan. And with one of the nation’s most celebrated film schools, he needs to deal with the same production risks faced by Hollywood studios.
For the large films, the thesis films, with budgets in excess of $100,000, we will sit down with the student and his or her production supervisor and go through the script for what we call the red flags. These are scenes that are being shot that take place either on or near the water; scenes that take place in hazardous buildings; scenes that have stunts in them.
And we make sure the students have properly risk managed those red flags and have created a risk-management plan not only for the scenes where the actors are acting but for the rest of the crew. For example, if they are shooting a scene in the desert, we make sure not only that they have all the proper communications equipment available to them, but they have someone who is certified in first aid and that they have items in their first-aid kit to deal with wildlife that they might come in contact with such as snakes.
The biggest exposure overseas is the lack of a sophisticated insurance market and the lack of having vendors able to provide the kinds of coverages similar to what we have here. You can purchase $1 million or $2 million dollars of General Liability fairly easily
and cheaply here. But in locations such as the Middle East, those limits of coverage are not readily available, and companies
doing business there on a local level might not have it or might not want to purchase it.
So you make a risk-management decision and a business decision: Do you want to really self-insure that risk within your own program because that vendor is the only one you can go to? That’s a very big decision when we do have to self-insure risks that are really not ours and should be transferred to a third party. In some instances, we do retain that risk; in other instances, we do go out and look for a different vendor.
We are constantly being asked to lend our rare books out and our artwork, and we are constantly receiving rare artwork and books into the university—so it’s a two-way street. We do maintain a comprehensive fine arts risk-management program that is equal to the finest museums in the world—we benchmark ourselves against museums here in New York like the Metropolitan and the Guggenheim to make sure that our agreements are really identical to the [terms] they would be looking at and requesting.
Our faculty and staff around the globe are really starting to actively embrace enterprise risk management. It’s a change-management process getting people to alter the way they think, to change the way they operate and to get them to understand that risk management is really not about insurance—it’s about everything that brings risk to the university. And our job is to be proactive, to be out there every day preaching the virtues of risk management and to move our enterprise program forward.
My senior managers ask me how long it takes to get the enterprise-risk program to maturity. And my stock answer is the program never matures because we continue to move forward, and the risks continue to evolve. New risks come on; the old risks get mitigated and become part of the normal business operations of the organization.