HomeMy WebLinkAbout1991-01-08 - AGENDA REPORTS - PURCHASE ADDITIONAL COVERAGE (2)l
UNFINISHED BUSINESS
DATE: January 8, 1991
AGENDA REPORT
City Manager Approval
Item to be presented by:
Terri Maus
SUBJECT: Purchase of Additional Coverage for 1991 Policy Year
DEPARTMENT: City Manager's Department
Background
On December 11th, cLaff presented the City Council with a recommendation as to
types and levels of insurance coverages needed for the 1991 year. At that time,
staff recommended and council approved the transition from a claims made form of
coverage to an occurrence form of coverage for our general liability and auto
liability policies. Claimsmade coverage refers to a type of coverage in effect
when in fact a claim is filed with the city. occurrence coverage covers all
claims at the date of the event or occurrence. By making the transition from a
claims made form of coverage to an occurrence form of coverage the City must
make provisions to cover events that may have already occurred, yet may be filed
during the time period in which occurrence coverage is in effect. Therefore, it
is necessary to purchase tail coverage to cover this uninsured period.
In order to best determine the length of time to purchase the tail coverage,
staff has interviewed a.variety of cities with strong risk management programs
in place as well as consulted with our City Attorney's Office. As a result of
these interviews, staff has determined that five years of coverage should be
secured.at a $5 million dollar limit. The cost to secure this coverage is
$81,481.
The $81,481 in additional coverage was not under consideration during the
preparation of the 1990/91 budget, therefore, it will be necessary to transfer
these additional funds from contingency into the self insurance fund in order to
not over burden th= self insurance fund account. Once the City is formally on
an occurrence form of coverage as opposed to the claims made form of coverage,
there will be no need to again procure this type of tail coverage.
Recommendation
Authorize the City Manager to purchase the additional tail coverage in amount
not to exceed $81,481. In addition, authorize the transfer of funds from
contingency account 101-4000-209 to account 126-4201-230 to cover the purchase
of the additional coverage.
Attachment
Contingency Fund Status
TM/tn-1902 APPROVED
Agenda Item: /
0 •
Representation
of
1990-91
Contingency Account
Date of Council Action
Item
Amount
Running
(Requested)
Description
Total
July 1, 1990
Contingency Appropriation
$1,500,000
$1,500,000
August 14,.1990
Antelope Fwy
(15,650)
1,484,330
August 28, 1990
P.A.R.E.T. Unit
(6,000)
1,474,350
September 11, 1990
Newhall Pool Recon.
(167,000)
1,311,350
September 11, 1990
SCV Historical Book
(13,850)
1,297,500
August 14, 1990
Special P.W. Supplies
(3,000)
1,294,500
October 9, 1990
Bus Advertisement
(1,500)
1,293,000
October 30, 1990
AB 939 Requirements
(84,607)
1,208,393
November 27, 1990
Purchase Fleet Vehicle
(93,000)
1,115,393
November 27, 1990
Development Impact Fee
Study
(60,000)
1,055,393
January 8, 1991
Fire Safety Program
(10,000)
1,045,393
January 8, 1991
Magic Mtn. Pky/San Fernando
Rd.(85,000)
959,393
TOTAL REMAINING IN CONTINGENCY
1/08/90
S 959,393
TM/tn-1777