Who Owns the Risk of International Programs?
Enthusiasm for international activities often overshadows the very real liabilities that can accompany such endeavors. A risk management director and some industry experts tell cautionary tales and offer well-learned advice.
By Jeanne Cure
A graduate archeology program at Wheaton College, Wheaton, Illinois, takes students on a summer dig in Jerusalem. One of the warnings listed on the program’s Web site states, “Admission is contingent upon current U.S. State Department travel advisories for the Middle East.”
While many overseas learning excursions won’t raise such specific concerns, it doesn’t mean that things can’t go awry in a foreign country. Institution leaders need to acknowledge that program participants will likely run into problems. When they do, there should be a plan already in place to try to make things right, said Wheaton’s director of risk management, Vincent Morris, at the NACUBO 2008 Annual Meeting presentation “Yours, Mine, and Ours: Who Owns the Risk of International Programs?”
Morris and copresenters William Hoye, executive vice president and chief operating officer for the Institute for International Education of Students (IES), and John Watson, executive director for the Higher Education Practice of Arthur J. Gallagher & Co., are well aware of the unexpected events that can befall students and faculty traveling abroad. Wheaton, for example, will sponsor more than 100 international activities in 2008 alone. So, Morris and his team prepare for everything from accidents and health issues to pickpocketing and natural disasters.
An Expanding Portfolio
A number of factors are pushing many institutions to take a closer look at cross-border programs and their implications. For example, the general push for internationalization is on the rise (see "Making It as a Multinational University" in the July-August 2008 issue of Business Officer). Hoye identified a number of other trends particular to higher education globalization that increase associated risk, including:
- Expansion into developing countries, where risk levels can differ from those with which the college or university has prior experience.
- Shorter average durations of study, meaning a greater number of programs to manage overall.
- Increased national attention and focus on international education, driven by government interest and action.
For example, Congress and the Bush administration appointed the Lincoln Commission to review study abroad options and recommend a program to increase the number of students studying abroad. Toward that goal, the commission’s 2005 report set a goal of one million American students studying abroad by 2016–17 and proposed a $50 million Abraham Lincoln Study Abroad fellowship program, increasing over time to $125 million.
Congressional response to the Lincoln Commission’s recommendations included the Senator Paul Simon Study Abroad Foundation Act of 2007 (to date, passed by the House but not yet by the Senate). This act would establish a foundation to award grants to be used primarily as scholarships for U.S. students on study abroad programs, particularly for study in nontraditional destinations.
- More faculty-led programs, often with less infrastructure (for example, an ad hoc program that is suddenly approved, making it difficult to put the necessary risk- management plans in place).
- Varied strategies for crisis management, drills, faculty and staff training, and so forth.
- Uneven approaches among providers to student health and safety. Some providers offer good health and safety checks, expert risk management, and careful vetting of transportation systems and host homes (including the fire safety of residences). Many, unfortunately, do not. Since glossy brochures look much the same, it is not always clear either to prospective students or to their institutions which programs are safer.
- Increased competition that drives institutions to push for more programs.
- A highly volatile market, in which providers of travel abroad programs often rapidly enter the scene to offer services but may just as quickly disappear and no longer be available.
- Affordability and accessibility concerns compounded by a weak dollar, limitations on approved programs, and risks associated with financial aid transfer. In particular, a weak dollar that is depreciating rapidly or unpredictably plays havoc with advance budgeting for programs, making it difficult for trip planners to set final budgets or announce to students what their fixed charges will be. For large-scale or centralized programs, however, more sophisticated risk management techniques such as purchasing currency futures options might be used to mitigate this risk.
- In addition, many students are interested in programs not offered by the institution directly, but which may be approved for credit in such a way that the student is able to apply financial aid to the program through the institution. Inconsistency in vetting or approving such programs may put the institution at risk, even as a pass-through agent for financial aid, if the argument can be made that the institution did not sufficiently investigate a program’s safety record before approving it.
Owning Up to Programs
In the presentation, Hoye and Watson joined Morris in acknowledging the difficulties that college and university leaders face in keeping up with their burgeoning activities and protecting against related adversities that might affect students and programs.
“Wheaton’s 2008 programs,” said Morris, “will involve more than 800 participants, including 443 students, 63 employees, 129 chaperones, and 175 others who support the programs in various capacities.” Aside from the sheer numbers, part of the risk factor has to do with the fact that many trips are nonacademic in nature, such as humanitarian aid trips, noted Watson. Although such trips involve students, trip organizers may fail to register with the college’s risk manager.
Watson noted other common situations that make it difficult for risk management to remain in the planning loop, including:
- Academic trips that involve students of a particular professor who may have registered with risk management—but at a different institution.
- Internships arranged by parties other than those associated with the school. These can become sticky propositions, particularly in the event of related health claims.
- Advertising of academic programs abroad. This can introduce another level of implicit or explicit institutional approval for a particular program. Such “approval” increases perceived ownership and, therefore, liability risk if something should go wrong.
Every additional tie to the institution, from money invested to credit offered to advertising placed, is one more move from “ours” to “yours” for trip ownership—and liability. Such situations can add to confusion as to who “owns” a particular program. Morris asked: “Is it the academic department, the provost’s office, the student health center? Does the program even ‘belong’ to our institution in any way?” Furthermore, who should assume responsibility for making sure that appropriate advance planning—and post-trip evaluation, a critical but often-neglected piece—is done?
Real Risks, Smart Contingencies
To be sure, if programs and people head out the door without contingency plans, risks and costs head right out with them. It’s even harder to manage liability of accidents that happen during a student’s free time abroad or treatment that takes place in a country other than where they’re scheduled to be.
Presenters shared several scenarios that demonstrated the importance of serious planning.
- If a traveling couple rents a car on a free weekend during a trip in Italy, then has a terrible crash that puts them in the hospital and kills occupants of the other vehicle, clearly the trip will be gravely affected. In this case, said Morris, the institution should have had clear “free-time” policies to remove itself from associated liability.
- Watson also gave a chilling example regarding the perils of free time: “Someone is injured during a faculty-led excursion to a gorge for bungee jumping. The outing occurs during a period of time designated as ‘free time,’ which is not part of the trip itinerary, nor was it discussed in literature or orientation. Is the school responsible? Is the faculty member entitled to indemnification from the institution? Does the school’s insurance coverage protect the institution and the faculty member? These things could have been clarified in advance trip documents.”
- Watson provided yet another example of transportation risk and need for proper insurance coverage: “A faculty member at a state-supported university was conducting research with a group of students in the Bahamas at an affiliated oceanographic facility. While the faculty member was driving a truck down a narrow road, a local man in a small car collided violently with the truck. The driver died. Although the faculty member was not at fault, the dead man’s parents sued him in the United States. While the faculty member normally would have been covered by the school’s insurance plan, that coverage was not available because the Bahamian facility’s insurance superseded it. The Bahamian insurance did not adequately cover the faculty member in his individual capacity.” If risk management had been aware of the transportation plans for this trip, explained Watson, appropriate insurance coverage could have been procured in advance.
A Mitigation Model
To be better prepared for such contingencies, Morris advised, communication between departments is key—and all roads should lead at some point to the risk management department, which is often housed in the business office. If institutions don’t have a specific department dedicated to travel abroad assistance, then programs should at minimum be vetted through a standard risk management process that minimizes risks and maximizes benefits.
At Wheaton College, the provost’s office has recently undertaken efforts to coordinate with risk management and other invested departments to standardize the process. A cross-campus force has worked together to create templates for trip leaders for application forms, liability waivers, and other contingency planning documents with the details for planning and managing their overseas activities. (For complete details of the Wheaton plan, see “Pack Preventive Measures Into Your International Programs,” in the December Business Officer Business Briefs section.)
Hoye listed some of the most common study abroad risks and the related precautions his office would take to reduce liability and cost. He also stressed that for particular situations, it is advisable to hire general counsel and an insurance expert who are knowledgeable in international laws and liabilities.
Common risks for which every trip should be prepared include the following:
- Simple but frequent problems like lost passports, incorrect airline tickets, or participant health concerns. Orient all participants with training on how to prevent and manage these possibilities. It is often wise as well for an institution to contract with an emergency travel services company, such as International SOS or MEDEX, to assist with such situations. Additionally, some colleges and universities find it helpful to file copies of passports and other personal information on the main campus for emergency reference. Others also have trip leaders carry photocopies of all participant health and passport information with them, but this practice carries identity crime risk if the files should be stolen.
- Pickpocketing, petty theft, assault, robbery, sexual assault, murder, and other serious crimes. Proper advance vetting of residence and destination safety along with preparation of participants in methods to prevent common crimes is essential. Administrators should include crises abroad in the list of situations included in campus emergency operations plans to cover possibilities such as kidnapping, ransom, and hostage situations.
- Sexual and other forms of harassment. Instruct all participants in advance as to what to do in case of such treatment and provide them with at least two avenues for reporting problems—in case one of the avenues happens to be the harasser.
- Traffic accidents. This is one of the most common sources of injury and liability on travel abroad programs. Trip planners should be acutely aware of this fact and work with reputable transportation providers to avoid notoriously dangerous roads or transportation methods.
- Natural disasters. Though rare, trip planners should be sure to devise emergency plans for catastrophic events such as tsunamis, earthquakes, and volcanic eruptions.
- Mental health issues. It is difficult to perform mental health screening in advance of a trip, particularly if an applicant is not manifesting unhealthy behavior at the time. It is also discriminatory to refuse access to a participant based on possible future mental health concerns. However, trip sponsors should be aware that it is all too common for a trip participant under the stress of travel to fail to take necessary medication or to have a breakdown in some way. Therefore, event leaders must have appropriate contingency plans in place.
In sum, travel risks remain challenging but manageable if proper advance preparations are made. To adequately prepare, apply the techniques of risk management to burgeoning travel abroad programs just as they are applied on campus. Keep in mind that an institution’s risk management department can be of great help in identifying and managing these risks. Involve the department early and regularly in the process of program formation or partnership. As Morris and his fellow presenters noted, these risks are difficult to manage after the problems have occurred.
Fortunately, assistance is available. Even if an institution doesn’t have a separate risk management department, the University Risk Management and Insurance Association provides significant resources to assist with risk management processes, while groups like NAFSA: Association of International Educators provide excellent good-practices documents for practical aspects of travel abroad. It can be difficult to determine whether a trip is “yours, mine, or ours,” but with the proper application of risk management techniques, administrators can sleep easier after saying bon voyage.
JEANNE CURE is program manager, professional development, at NACUBO.