Bryant Rousseau: Michael, one of the great challenges of being a risk manager at a major university is that you have such a diversity of coverages under one roof. Let's just start with the dormitories—an exposure that few corporate risk managers ever have to worry about.

Michael Liebowitz: Dormitories are one of our biggest exposures, both locally and abroad. The risk is quite similar to hotel exposure where you have thousands of people living in one high-rise building. But unlike a hotel, I have students from age 17 to 25 living together in a commune-type situation where this is the first time, in many instances, where they've actually lived alone. So the exposures we are looking for there: It's the risk of being injured from fights; it's playing and horsing around; it's theft; it's breakage of furniture and other articles that are owned by the university.

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

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

Our coverage needs are exactly like a Hollywood production would purchase. Our students are making everything from short films—they might be two minutes long and shot using a hand-held camera on the street—to full-length feature productions that have budgets in excess of $1 million.

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.

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

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

Have you ever had to say no to a film student? Has there been some scene that was just too risky to allow them to go forward with?

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

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

One of the key trends in higher education is American universities expanding their presence abroad, and NYU is certainly at the forefront there. You have a number of campuses overseas. What are some of the unique risks that come with that sort of international expansion?

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.

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

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

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

By far the biggest exposure is the sidewalks in front of our buildings. The City of New York mandates that owners are responsible for anything that takes place on their sidewalks, so we're responsible for maintenance and repair. Luckily we have a very good sidewalk-identification program in place where the building managers actually monitor their sidewalks.

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

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

NYU is doing construction around the world, but the biggest construction risks are right here in NYC. Those risks on a large scale are insured through a rolling wrap-up program that the university has, which allows us the flexibility of managing our costs.

We have a huge emphasis on safety, so every construction program, no matter how big or how small, has a minimum of three safety managers: One from the owner, one from the construction manager and one from the insurer. These safety managers, on a rotating basis, walk the site monthly, make recommendations and report back. That has helped us to reduce our Workers' Comp costs—which also reduces our liability cost based upon the labor law in New York State.

You also have museums showing major art exhibitions—what are some of the challenges with those sorts of risks?

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.

In the fine arts world we look for something called nail-to-nail coverage where an entity takes responsibility and ensures that the artwork makes it from Point A to Point B. Sometimes we're responsible for it, and sometimes it could be the lending institution that's responsible for it. But we're equipped to handle it either way we have to, and we have the staff and the expertise within the university to do that.

What about Workers' Compensation—what are some of the unique risks a university faces on that front?

The possibility of an occupational injury is a risk that all organizations doing business face. What complicates ours is we have people who spend a lot of time in foreign countries, we have people who are constantly moving via air, and we have one of the most labor-intensive risks within an organization: a hospital. So when you 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 your standard hospital exposures: We're dealing with needle sticks; we're dealing with combative patients; we're dealing with back injuries. At the university, it's really slips and falls and the occasional [incident] in a laboratory where someone gets a respiratory infection due to the inhalation of a chemical. But they don't happen very often; the exposures here at the university are very small compared to the exposures at our medical center.

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

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

And likewise we have HIPAA-protected information both here at Washington Square in our student-health facility and up at our medical center. So maintaining all of those medical records and the confidentiality of the records that are protected under HIPAA from a 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 very quickly to ensure that people aren't able to hack our systems.

The other big Cyber exposure is the proliferation of smartphones and laptop computers where people take this information and are now mobile. We are moving toward an encryption methodology for all those devices. The medical center is already there.

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

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

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.

Being the head risk manager at a major university entails a huge number of challenges. But also, I imagine, a great deal of professional satisfaction. What do you enjoy most about the job?

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

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

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

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

I'll make this a really easy answer: Jump in feet first, get yourself wet, and get immersed in all aspects of an organization's operations. Learn it from the ground up, meaning learn the risk-transfer piece and continually build from there. Learn the claims, learn the underwriting, look at the enterprise-risk-management program. Understand how your organization works internally. What are its current goals?  Future goals?

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