Service Learning Network

Risk Management Terms

The following terms are often used interchangeably in conversations regarding liability and risk management, but their understood meanings can differ significantly.  As such, it is important to establish concrete definitions of the terms that will be used in this section.

Risk- the possibility for loss, injury, or destruction of property, financial resources people, and community reputation and good will1

Risk Management - the system of policies, procedures, and safeguards put into place by an organization to prevent loss and/or unauthorized use of funds, reduce the likelihood of injury, and ensure compliance with relevant laws and regulations1

Legal liability - "The responsibility that one party has for a wrong done to another, when a court or administrative agency has found that the wrong constitutes a violation of law."2

Indemnification- "An agreement to reimburse, or the process of reimbursing, an agent of the institution for any money damages the agent is liable for on a legal claim against the agent involving actions taken on behalf of the institution.  Indemnification may also cover the costs and expenses an agent incurs in defending against such a legal claim or provide for legal representation for the agent.  Indemnification may also refer to another party's contractual obligation to reimburse the institution for damages or expenses the institution has incurred in performing the contract."2

Negligence - "A legal claim or cause of action that arises when a person or entity: (a) owes a "duty of care" to another person or entity; (b) fails to exercise reasonable care with respect to that person or entity; or (c) thereby causes injury to that person or entity."2


1Torres, J. & Sinton, R. (2000). Establishing and maintaining an office of community service. Campus Compact.

2Kaplin, W. A., & Lee, B. A. (2007). The law of higher education (4th ed.). San Francisco: Jossey-Bass.

Page last modified March 25, 2014