Clarification Regarding the University's Liability Insurance Funding

Monday, April 25, 2022, 6:45am

Dear Sonoma State University campus community,

The University is providing clarification on an issue that has been the subject of recent news reports: the impact of settlements on Sonoma State University’s budget. The university stated that settlements are paid by insurance, which is accurate, but upon additional review of Sonoma State’s participation in the CSU self-insurance risk financing program, we offer the following clarifying information.  

Insurance is a normal business expense for any public or private organization. All CSU campuses, including Sonoma State, contribute to the system-wide California State University Risk Management Authority (CSURMA), which is an insurance pool that funds the resolution of claims. The cost of litigation and settlements are covered by CSURMA after the campus pays its deductible. Sonoma State University’s insurance deductible is $250,000.  

Sonoma State University’s contribution (insurance premiums) to CSURMA and its deductibles are, in fact, funded through revenue sources that include student tuition and fees, and enterprise activities such as parking, student housing fees, professional and continuing education, and retail functions.

The university’s budget has an annual allocation of $150,000 for potential legal settlements. These funds will be used to pay a portion of the $250,000 insurance deductible. The additional $100,000 for the deductible is anticipated to come from a contingency line item in the university’s budget. 

As an institution entrusted with public and auxiliary resources, student tuition and fees, and private donations, Sonoma State University takes its fiduciary responsibilities extremely seriously, and we make every effort to remain transparent and forthright with our community and the public. We remain committed to meeting this standard.