Being bored at work is never anissue for Michael Liebowitz. As the head of the risk-managementdepartment at New York University, one of the country's largestprivate institutions of higher learning, Liebowitz faces anincredible array of risks every day—many of which never crop up inCorporate America.

In addition to such standard-issue perils as Workers'Compensation, Employment Practices Liability and the CommercialProperty exposures that come with being one of New York City'slargest landlords, Liebowitz also has to think like the riskmanager at a major hotel chain—with more than a dozen high-risedormitories scattered around Manhattan. And with one of thenation's most celebrated film schools, he needs to deal with thesame production risks faced by Hollywood studios.

And then there are science research labs. Museums. A majorresearch hospital. And while most American businesses are dealingwith an aging workforce, Liebowitz's core constituency is anever-replenishing fountain of youth: students aged 17-25—not ademographic known for being very risk-averse.

NU's editor-in-chief, Bryant Rousseau, sat down withLiebowitz, a former president of the Risk and Insurance ManagementSociety and a member of the NU's Risk Managers AdvisoryBoard, in his office overlooking Broadway for an in-depthdiscussion about the unique professional challenges—andrewards—that come with a collegiate portfolio.

Bryant Rousseau: Michael, one of the greatchallenges of being a risk manager at a major university is thatyou have such a diversity of coverages under one roof. Let's juststart with the dormitories—an exposure that few corporate riskmanagers ever have to worry about.

Michael Liebowitz: Dormitories are one of ourbiggest exposures, both locally and abroad. The risk is quitesimilar to hotel exposure where you have thousands of people livingin one high-rise building. But unlike a hotel, I have students fromage 17 to 25 living together in a commune-type situation where thisis the first time, in many instances, where they've actually livedalone. So the exposures we are looking for there: It's the risk ofbeing injured from fights; it's playing and horsing around; it'stheft; it's breakage of furniture and other articles that are ownedby the university.

But the biggest issue for us is really a catastrophic issuewhere I sustain claims because of injury and/or death on a massscale. The biggest risk that concerns us, and it has happened inother universities throughout the country, is a fire in a dormitoryroom. People, no matter how many times you drill them, when theyhear the fire alarms, they will panic—especially when you have thatmany people in what is really a small space. And when people panic,they tend to get hurt. They make the wrong decisions. That's theexposure I insure for here at NYU.

NYU has a very famous film school—Spike Lee andOliver Stone are professors—so you have coverage needs that arevery similar to a Hollywood production studio.

Our coverage needs are exactly like a Hollywood production wouldpurchase. Our students are making everything from short films—theymight be two minutes long and shot using a hand-held camera on thestreet—to full-length feature productions that have budgets inexcess of $1 million.

For the large films, the thesisfilms, with budgets in excess of $100,000, we will sit down withthe student and his or her production supervisor and go through thescript for what we call the red flags. These are scenes that arebeing shot that take place either on or near the water; scenes thattake place in hazardous buildings; scenes that have stunts inthem.

And we make sure the students have properly risk managed thosered flags and have created a risk-management plan not only for thescenes where the actors are acting but for the rest of the crew.For example, if they are shooting a scene in the desert, we makesure not only that they have all the proper communicationsequipment available to them, but they have someone who is certifiedin first aid and that they have items in their first-aid kit todeal with wildlife that they might come in contact with such assnakes.

And we go over safety issues they don't really think about, likehow to store the gasoline they need to power the generators theyuse for lighting and for charging batteries.

We make them put safety into their programs every day: When theydo their pre-production meetings at the beginning of each day'sshoot, safety is a part of that. The faculty is responsible forgoing back and looking at their safety diaries to make sure thathas taken place. Then occasionally we'll match up the films to thescript to make sure what they actually said they were going to doand what they put in a film are the same things. It goes to thehonesty and the ethical responsibility of the student.

Have you ever had to say no to a film student? Hasthere been some scene that was just too risky to allow them to goforward with?

We say no probably 5 percent of the time. We almost always finda way to have the student make the shot in a safe way. Filmmakingis creating the illusion that you shot the scene and getting theaudience to believe that it really took place without doing it—suchas shooting in a “moving” car when the car doesn't move.

These are the kinds of tricks that we try to explain and teachour students when they sit down with us. Another one is studentslove to break glass. Well, you can get hurt with glass. Glass goesflying all over the place. The cleanup is very messy, and you canget hurt. We may have our students use something called sugarglass; it looks like real glass, it sounds like real glass, butit's not real glass. So there's many different ways in filmproduction to trick the scene.

One of the key trends in higher education isAmerican universities expanding their presence abroad, and NYU iscertainly at the forefront there. You have a number of campusesoverseas. What are some of the unique risks that come with thatsort of international expansion?

The biggest exposure overseas is the lack of asophisticated insurance market and the lack of having vendors ableto provide the kinds of coverages similar to what we have here. Youcan purchase $1 million or $2 million dollars of General Liabilityfairly easily
and cheaply here. But in locations such as the Middle East, thoselimits of coverage are not readily available, and companies
doing business there on a local level might not have it or mightnot want to purchase it.

So you make a risk-managementdecision and a business decision: Do you want to really self-insurethat risk within your own program because that vendor is the onlyone you can go to? That's a very big decision when we do have toself-insure risks that are really not ours and should betransferred to a third party. In some instances, we do retain thatrisk; in other instances, we do go out and look for a differentvendor.

And are you compelled to buy a lot of Political Riskcoverage for the international campuses?

At this point our campuses are in countries that are stable,have stable governments, use currencies that are stable at thisparticular instant in time, so the need for Political Risk coverageis very small. We constantly are monitoring, though, the worldscapein terms of the politics of all the countries where we operate. Butat this particular juncture, Political Risk is on the radar screen,but we're not actively engaged in the market looking for suchcoverage.

NYU is one of NYC's largest landlords, so you havemassive property exposures as well.

By far the biggest exposure is the sidewalks in front of ourbuildings. The City of New York mandates that owners areresponsible for anything that takes place on their sidewalks, sowe're responsible for maintenance and repair. Luckily we have avery good sidewalk-identification program in place where thebuilding managers actually monitor their sidewalks.

This is a fairly new program we put in place over the last fouryears after doing a sidewalk survey. The way we were able to getour facilities people to embrace this is by explaining to them howmany hundreds of thousands of dollars you can pay for a trip andfall on the sidewalk—and how less expensive it is to repair thesidewalk.

NYU is really growing exponentially, so you have alot of construction risks as well.

NYU is doing construction around the world, but the biggestconstruction risks are right here in NYC. Those risks on a largescale are insured through a rolling wrap-up program that theuniversity has, which allows us the flexibility of managing ourcosts.

We have a huge emphasis on safety, so everyconstruction program, no matter how big or how small, has a minimumof three safety managers: One from the owner, one from theconstruction manager and one from the insurer. These safetymanagers, on a rotating basis, walk the site monthly, makerecommendations and report back. That has helped us to reduce ourWorkers' Comp costs—which also reduces our liability cost basedupon the labor law in New York State.

You also have museums showingmajor art exhibitions—what are some of the challenges with thosesorts of risks?

We are constantly being asked to lend our rare books out and ourartwork, and we are constantly receiving rare artwork and booksinto the university—so it's a two-way street. We do maintain acomprehensive fine arts risk-management program that is equal tothe finest museums in the world—we benchmark ourselves againstmuseums here in New York like the Metropolitan and the Guggenheimto make sure that our agreements are really identical to the[terms] they would be looking at and requesting.

In the fine arts world we look for something called nail-to-nailcoverage where an entity takes responsibility and ensures that theartwork makes it from Point A to Point B. Sometimes we'reresponsible for it, and sometimes it could be the lendinginstitution that's responsible for it. But we're equipped to handleit either way we have to, and we have the staff and the expertisewithin the university to do that.

What about Workers' Compensation—what are some ofthe unique risks a university faces on thatfront?

The possibility of an occupational injury is a risk that allorganizations doing business face. What complicates ours is we havepeople who spend a lot of time in foreign countries, we have peoplewho are constantly moving via air, and we have one of the mostlabor-intensive risks within an organization: a hospital. So whenyou put that all together, it creates a medley, a “vegetable soup”mix of risks we have to be flexible enough to manage.

When we're talking about our hospital, we're looking at yourstandard hospital exposures: We're dealing with needle sticks;we're dealing with combative patients; we're dealing with backinjuries. At the university, it's really slips and falls and theoccasional [incident] in a laboratory where someone gets arespiratory infection due to the inhalation of a chemical. But theydon't happen very often; the exposures here at the university arevery small compared to the exposures at our medical center.

And between the hospital and the fact that you'restoring very sensitive student-education records, I imagine thatCyber Liability is a growing concern for you?

Cyber Liability is a huge concern for the university because weare maintaining not only student records, which contain theirgrades, but we have personal information such as checking accountnumbers, Social Security numbers, addresses, names of parents.

And likewise we have HIPAA-protected information both here atWashington Square in our student-health facility and up at ourmedical center. So maintaining all of those medical records and theconfidentiality of the records that are protected under HIPAA froma cyber attack is a great concern to the organization.

We routinely employ organizations to come and hack our systems,and we look at the vulnerability of those reports and work veryquickly to ensure that people aren't able to hack our systems.

The other big Cyber exposure is the proliferation of smartphonesand laptop computers where people take this information and are nowmobile. We are moving toward an encryption methodology for allthose devices. The medical center is already there.

You're known as a leader not only in enterprise riskmanagement, but also in the emerging field of strategic riskmanagement. What are your latest efforts here?

From a strategic perspective, I'm talking to the visionaries ofthe university in senior management to get their ideas of where NYUis going to be moving to in the next three to five years. And we'rebeginning to develop the risk map for that.

Our faculty and staff around the globe arereally starting to actively embrace enterprise risk management.It's a change-management process getting people to alter the waythey think, to change the way they operate and to get them tounderstand that risk management is really not about insurance—it'sabout everything that brings risk to the university. And our job isto be proactive, to be out there every day preaching the virtues ofrisk management and to move our enterprise program forward.

My senior managers ask me how long it takes to get theenterprise-risk program to maturity. And my stock answer is theprogram never matures because we continue to move forward, and therisks continue to evolve. New risks come on; the old risks getmitigated and become part of the normal business operations of theorganization.

Being the head risk manager at a major universityentails a huge number of challenges. But also, I imagine, a greatdeal of professional satisfaction. What do you enjoy most about thejob?

Every day I come to work and the issues are different. The worldis continually changing, the NYU world is continually changing, andthat constant change is very good.

But even more satisfying than that is we can actually sit downand talk to people and come up with a safe way for them toaccomplish what they're out to do. So we can have researcherscomplete their investigations in a safe manner. So a film studentwho has a lot of red flags in a film can complete his or her filmand get a good grade and go on to become a famous director.

Remember, students and faculty don't do what they do every daybehind a desk, whether they're in primary education or they'reinvolved in university research or the development of new products.We need to make sure all of their goals can be worked toward, andthat we don't say no. Because if we say no, the university doesn'tget to meet its ultimate goal of having people excel in theirchosen field. It's very easy to say no, and we don't want to sayno.

What about educating the next generation of riskmanagers? What's the best advice you could give to someone who'sjust starting out in the RM field?

I'll make this a really easy answer: Jump in feet first, getyourself wet, and get immersed in all aspects of an organization'soperations. Learn it from the ground up, meaning learn therisk-transfer piece and continually build from there. Learn theclaims, learn the underwriting, look at theenterprise-risk-management program. Understand how yourorganization works internally. What are its currentgoals?  Future goals?

And continue to build your education. Networking and educationis invaluable from a risk-management perspective. The world iscontinually changing; our profession is continually changing. Inorder for us to stay relevant as risk managers, we need to continueto change and morph as the world and our organizations change.